Halloween is a fun time; however, when insureds make assumptions about their insurance coverage, it can be downright scary for an insurance professional. Here are three assumptions many people make about their insurance that are not just wrong, they are terrifying!

"Once I buy an insurance policy, I don't have to worry about it again..."

Ahhhh!  As they say, the only thing constant is change.  Vehicles get replaced, commutes change, loans get paid off or added, additions and upgrades occur at homes, businesses change to adapt to demand, exposures change over time with cyber liability and employer practices liability claims... the list goes on and on.  

Though insurance agents work hard to uncover the unknown, they do not have a crystal ball.  It is up to the insured to look at each insurance policy at least upon every renewal to ensure coverage is what they expect.  If you don't understand something, contact your insurance professional as they can explain what is or is not included in your coverage.

"I have a personal umbrella insurance policy, so I am covered for everything!"

Yikes! Personal umbrella insurance typically provides an additional layer of liability coverage over personal insurance policies, like home and auto insurance; however, it is not a net of protection over everything!

• A personal umbrella can provide coverage over owned recreational vehicles and watercraft as well, but typically only if listed on the umbrella and have separate underlying policies.  
• All business activity is typically excluded from a personal umbrella.
• An umbrella policy is designed to provide an additional layer of liability protection if you are found legally liable for causing injury or property damage to someone else outside your household.   It is not designed to fill a coverage gap for say a new vehicle you purchased but forgot to add to your car insurance policy, or it was determined that the dwelling coverage on your home was not adequate to rebuild. 

"I don't need to buy the insurance offered by the car rental company when I rent - my policy will cover it."

Oh-no!  Like many issues in insurance, this is a gray area.  If renting in the US and Canada, most car insurance policies follow the named insured on any car driven with permission- but only for the coverage carried on insured's own car insurance policy.  This means that if the named insured decides not to carry collision coverage on a ten-year-old vehicle, there will be no collision coverage on the brand-new rental!

Even if you do carry high liability limits and physical damage coverage on your auto policy, the rental agreement is between you and the rental agency.  The rental company could include language in the contract you sign with them making you responsible for loss-of-use fees, administrative fees and diminished value, to name a few.  As these are not typically part of your own auto coverage, it would not typically extend to the rental agency either. 

One way to avoid being terrified while standing at the car rental agency counter is to find out beforehand what your personal auto policy covers while renting a car, and what it does not.  Some insurance companies offer additional coverage to fill some of these car rental gaps, but it is not automatic, so ask first.  Your credit card company may also offer some protection so certainly worth a little research.

Insurance does not have to be scary!  With a little time, you can work with your local agent to ensure there are no surprises that will give you a fright.  Happy Halloween!