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Many consumers seldom take the time to read the fine print of their health, auto and home insurance policies. But it’s important to know what is and is not included in your policy in the event a claim needs to be filed. The National Association of Insurance Commissioners (NAIC) compiled a list of common insurance misconceptions consumers should know.

  • You only need collision and liability coverage for your vehicle.

Liability coverage protects you and your family if you’re at fault during an accident and will cover damages to property, vehicles or people up to your policy limits. Collision coverage will cover costs to repair your vehicle (minus the deductible) in a collision such as hitting a pole, vehicle or other object. However, if your vehicle is stolen or flooded or if you hit a deer, you’ll need comprehensive coverage to recoup your loss.

  • If you lend your car to a friend and they crash, their insurance will cover it.

Auto insurance follows the vehicle, not the driver, so your insurer would bear the primary responsibility for any damage a friend causes while borrowing your vehicle. If the damage exceeds your policy limits, then your friend’s policy would kick in as secondary.

  • You don’t need any additional rental car insurance because your credit card will cover you.

Many credit cards will only cover collision insurance, not liability which means you’ll be on the hook for the other driver’s damages if you’re at fault. Also, depending on where you travel, your credit card company may restrict coverage. However, your own auto insurance policy might cover a rental car, so be sure to call them as well.

  • Health insurance is available for purchase whenever you need it.

To purchase coverage in the individual market and off the Exchange, you must either purchase during open enrollment or experience a qualifying life event. Additionally, if you get a new job that offers health insurance, you may have to wait 30-60 days before your coverage takes effect.

  • Health insurance will pay the same, no matter where you receive care.

Insurers negotiate payment rates with networks of providers.  If you use a provider outside your insurer’s network, your insurer may not cover the entire bill and you may be required to pay more out-of-pocket.  Check to see if your provider is in your insurer’s network to avoid a surprise bill.

  • Your state’s minimum auto liability coverage is sufficient.

If you’re at fault for an accident where you damage an expensive vehicle or more than one vehicle, your minimum property damage limits might not cover the full costs of the damage. Have you checked what your liability limit is for bodily injuries? Serious injuries or even death can translate into millions of dollars in settlement fees. In this case, you’re personally responsible for the costs not covered by your auto insurance policy.

  • A tree in your backyard fell and hit your home; therefore, the removal and damages are covered.

If the tree was damaged by water or wind, you may not be able to get it replaced depending on the language of your policy.  If not, you’re covered for damages to your home and any of your belongings that were also damaged. You will have to pay your deductible, but your homeowners insurance typically will also cover the cost of removing the tree and even replacing it.

  • Homeowners insurance means you’re covered for flooding losses.

Flood insurance is not covered as part of standard homeowners and renters insurance policies. If you want to be covered for flood damage, you’ll have to purchase coverage specific to flooding. If you live in a flood zone or if your home could be flooded by an overflowing creek or pond or even water running down a hill, look into buying flood insurance. And buy it before you need it as there is a 30-day waiting period after purchase before the coverage takes effect.

Consumers with questions about their insurance coverage can call the Division of Insurance’s Consumer Services Unit at (617) 521-7777. The Division’s website at also provides valuable information regarding all lines of insurance, including auto and homeowners.

The Office of Consumer Affairs and Business Regulation along with its five agencies work together to achieve two goals: to protect and empower consumers through advocacy and education, and to ensure a fair playing field for Massachusetts businesses. The Office also oversees the State’s lemon laws, data breach reporting, and home improvement contractor programs, and the State’s Do Not Call Registry. Follow the office at its blog, on Facebook, and on Twitter @Mass Consumer.

The National Association of Insurance Commissioners (NAIC) is the U.S. standard-setting and regulatory support organization created and governed by the chief insurance regulators from the 50 states, the District of Columbia and five U.S. territories. Through the NAIC, state insurance regulators establish standards and best practices, conduct peer review, and coordinate their regulatory oversight. NAIC staff supports these efforts and represents the collective views of state regulators domestically and internationally. NAIC members, together with the central resources of the NAIC, form the national system of state-based insurance regulation in the U.S. For more information, visit


If you have additional questions, contact the Office of Consumer Affairs and Business Regulation by calling our Consumer Hotline at (617) 973-8787, or toll-free in MA at (888) 283-3757, Monday through Friday, from 9 am-4:30 pm. Follow the Office on Facebook and Twitter, @Mass_Consumer. The Baker-Polito Administration’s Office of Consumer Affairs and Business Regulation along with its five agencies work together to achieve two goals: to protect and empower consumers through advocacy and education, and to ensure a fair playing field for Massachusetts businesses. The Office also oversees the state’s Lemon Laws and Arbitration Program, Data Breach reporting, Home Improvement Contractor Programs and the MA Do Not Call Registry.

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