Insurance provides critical financial relief for a variety of incidents. To make the most of it, you need to be informed about how it works and what it covers. Here are some common misconceptions about factors that affect your coverage. 

3 Common Insurance Myths

1. If Someone Borrows Your Car, They're Liable for Damages

It's a common misconception that if you lend your vehicle to a friend or relative, their insurance will cover the cost of damages. In reality, any damage to your vehicle or another individual's vehicle or property would be covered under your policy, including increases to your monthly premium.

If the damages exceed your policy's coverage limits, the driver's personal coverage would then be billed to cover the difference. 

2. Homeowners Policies Cover Floods

Homeowners policies don’t cover water damage caused by tidal surges, overflowing bodies of water, or flash floods. You need a flood insurance policy to cover those hazards.

For some individuals who live in high-risk flood zones, flood policies may be required by their mortgage lenders. 

3. Minimum Liability Coverage Is Enough

Nearly every state requires you to carry a minimum amount of liability coverage for your vehicle. While buying the minimum meets legal requirements, it also means you're likely to pay more out-of-pocket if you're held liable for any accident.

Most state minimums are relatively low when compared to typical losses incurred after an accident, including medical expenses, lost wages, and property damage. Many experts recommend doubling or tripling the minimum requirements.

Find the right coverage for your needs by contacting First Insurance Company of Hawaii in Honolulu. For over 100 years, their team has provided a variety of policies and coverage types to meet the needs of their clients. Contact them today at (808) 527-7777 or visit them online to learn more about their services.