4 insurance myths uncovered

It might seem like a boring topic, but getting the right insurance is really important. Whether you're protecting your home, vehicle, holiday or even your pet it's vital that you know about all the ins and outs involved.

So, how clued up are the public when it comes to insurance? I hit the streets of London to find out!

MYTH 1) An EHIC card is a substitute for health insurance

Q: What is an EHIC card?

Very few of the people we interviewed knew what an EHIC card is, never mind what it does.

 The EHIC card entitles you to any necessary state-provided medical treatment while you are in a participating European country. In short, if you have one of these cards you’ll be medically treated like a citizen of that country.

However, although the EHIC card is vitally important, it does not pay for ambulance air travel  back to the UK or cover you for things like lost bags or cancelled accommodation. So, you still need to make sure you take out travel insurance, as well as picking up a EHIC card to get the full cover.

Visit EHIC.ORG.UK for info on how to pick up a card.

MYTH 2) You don’t have to tell your insurer if you get a few points on your licence.

Q: Do you need to tell your insurer of you get a few points on your licence?

Most of the people we interviewed thought you did have to tell them about points on their licence – whether they actually would or not is another story.

 It may be tempting to not mention those few points on your license, but your motor policy will become invalid if you fail to disclose all the relevant information on your driving history, including how many points you have.

So make sure you’re completely honest when you apply for insurance to avoid getting caught out later.

MYTH 3) You will get back what you paid for your car if it’s stolen or written off.

Q: If you’re car is stolen or written off, will your insurers reimburse you in full for the amount that you paid for your car?

Many of the people we interviewed thought they would.

They were wrong. The value of your car drops pretty fast and your insurer will only pay what it was worth when it was damaged or stolen.

They typically pay the market value of your car, which is how much they think your car would have sold for on the open market before the accident or loss.

So, this means you’re unlikely to get back the full amount of what you paid for your car.

MYTH 4) Your home insurance will cover any accidental damage to your belongings that occurs in your home.

Q: Do you think home insurance automatically covers you for accidental damage?

Again, many of the people we interviewed thought it would.

Like them, you may think you’re automatically covered for accidental damage, but in most standard policies you are not.

However, if you pay an extra premium to have accidental damage cover added onto your insurance policy, then you will be covered.

The key is to always read the small print before signing up for any type of insurance and make sure you know exactly what is covered and for how much.

Compare home insurance quotes at lovemoney.com