Skip to main content

Life Sense

Top 8 Insurance Myths

There are a lot of misunderstandings about insurance floating around. Read on for answers to the most pervasive insurance myths.

Myth: Your insurance premium shrinks as your vehicle gets older.

Most insurance companies haven’t taken a car’s age into account when determining auto premiums in years. One way to maintain cost-effective coverage is through ERIE Rate Lock®*, an extra coverage that freezes your auto premium year after year even if you file a claim. Your premium only changes when you add or remove a vehicle or a driver from your policy, change your primary residence and change your policy coverage or pay plan.

Myth: Only millionaires need an umbrella policy.

Even if your net worth doesn’t seem like much, a personal injury or liability lawsuit can wipe you out financially—and destroy any future earnings, too. Protect what you've worked so hard for with an ERIE Personal Catastrophe Liability policy. It provides an extra $1 to $5 million of liability protection in case you’re hit with a lawsuit that exceeds your homeowners or auto policies. And it’s more affordable than you might think.

Myth: Red cars cost more to insure.

Red is often associated with risk takers with a hankering for fast cars—but it’s the make, model and year of a car that really affect your premiums.

Myth: You don’t need a commercial insurance policy if you work from home.

Even cottage industries may need at least some form of property, liability, business vehicle and workers’ compensation insurance. Your ERIE Agent can give you a detailed idea of what level of protection you need.

(Sort of) Myth: If your house burns down, your insurance policy will give you enough money to rebuild it exactly as is.

Many insurance companies don't offer Guaranteed Replacement Cost to cover the entire value of your home’s worth—or they’ll have a capped replacement cost that only replaces a certain percentage of the home’s value. Luckily, ERIE automatically includes it as a part of many of its homeowners policies.** (You can purchase an affordable endorsement for the policies that don’t include it.)

*Not available in North Carolina, Maryland and New York. Limited to three years in Virginia. ERIE Rate Lock® does not guarantee continued insurance coverage. Insured must meet applicable underwriting guidelines. Premium may change if you make a policy change.

**Guaranteed Replacement Cost requires home improvements over $5,000 to be reported within 90 days. Coverage of costs to comply with laws or ordinances is subject to limits. Depreciation may be deducted until repair or replacement is made. Go to http://www.erieinsurance.com/homeowners/guaranteed-replacement-cost.aspx or contact your Agent for more information.

Straight from the myth busters

The ERIE Customer Service team fields all kinds of calls from Customers. Here are some of the most widely held misbeliefs they hear.

Myth: If you don’t want to renew your policy, just don’t pay your premium.

Most companies auto-renew in order to prevent a lapse in insurance coverage. If you’re not looking to renew, give your Agent a head’s up.

Myth: It was an act of God…so, there’s no deductible, right?

Sorry, but pretty much no insurance carrier waives deductibles on weather-related claims.

Myth: Getting a speeding ticket out of state will not show up on my driving record—or affect my insurance premium.

Most states share data, so traffic violations will likely appear on your in-state motor vehicle record and could trigger a surcharge regardless of where they occur.

Have more burning insurance questions? Then don’t hesitate to call your trusted ERIE Agent for fast and accurate answers.

There are a lot of misunderstandings about insurance floating around. Read on for answers to the most pervasive insurance myths. /blog/top-8-insurance-myths Erie Insurance https://www.erieinsurance.com/-/media/images/erieinsurance/erieinsurancelogo.png

ERIE® insurance products and services are provided by one or more of the following insurers: Erie Insurance Exchange, Erie Insurance Company, Erie Insurance Property & Casualty Company, Flagship City Insurance Company and Erie Family Life Insurance Company (home offices: Erie, Pennsylvania) or Erie Insurance Company of New York (home office: Rochester, New York).  The companies within the Erie Insurance Group are not licensed to operate in all states. Refer to the company licensure and states of operation information.


The insurance products and rates, if applicable, described in this blog are in effect as of September 2012 and may be changed at any time. 


Insurance products are subject to terms, conditions and exclusions not described in this blog. The policy contains the specific details of the coverages, terms, conditions and exclusions. 


The insurance products and services described in this blog are not offered in all states.  ERIE life insurance and annuity products are not available in New York.  ERIE Medicare supplement products are not available in the District of Columbia, New York and Wisconsin.  ERIE long term care products are not available in the District of Columbia and New York. 


Eligibility will be determined at the time of application based upon applicable underwriting guidelines and rules in effect at that time.


Your ERIE agent can offer you practical guidance and answer questions you may have before you buy.