8 Common Insurance Myths That Could Leave You Unprotected

March 11th is Debunking Day, which makes it the perfect moment to clear up some long‑standing confusion around home and auto insurance. Many people make coverage decisions based on misunderstandings or outdated information—and that can create expensive surprises when something goes wrong.

To help you stay informed and protected, here’s a refreshed look at eight insurance myths that continue to circulate and what’s actually true instead.

Myth #1: “Red cars cost more to insure.”

The truth: The color of your car has zero impact on your insurance premium. Whether your vehicle is bright red, matte black, or neon green, insurers don’t factor color into their pricing. What really matters are things like the make and model, how old the car is, its safety features, engine type, mileage, where you live, and your driving record.

Myth #2: “Flood insurance is only necessary if you live in a flood zone.”

The truth: Flooding can happen almost anywhere—not just in high‑risk areas. Roughly one‑quarter of flood claims actually come from properties outside designated flood zones. And most standard homeowners policies do not cover flood damage. If you live in an area where rain is a reality (that’s most places), it’s wise to at least explore flood insurance.

Myth #3: “Older cars don’t need full coverage.”

The truth: Even if your vehicle has depreciated over time, liability coverage is still required in most states. And if you depend on your car for daily life and couldn’t easily cover repair or replacement costs after an accident, collision and comprehensive coverage might still be well worth it. Age alone shouldn’t be the deciding factor.

Myth #4: “My homeowners policy protects everything I own.”

The truth: Homeowners insurance does include personal property coverage, but it typically comes with limits based on a percentage of your home’s insured value. High‑value items—like luxury jewelry, rare collectibles, or premium electronics—can exceed those limits. To fully insure special belongings, you may need scheduled coverage or an additional endorsement.

Myth #5: “Anyone who drives my car is covered by my insurance.”

The truth: While many policies extend coverage to occasional drivers with your permission, the rules aren’t universal. Business use, delivery work, ridesharing, or frequent use by someone outside your household may not be covered. If another person drives your car regularly or uses it for work, you’ll want to confirm they’re properly insured under your policy.

Myth #6: “I don’t need homeowners insurance if I have strong savings.”

The truth: An emergency fund is helpful, but it likely can’t absorb the financial impact of a major disaster. Homeowners insurance protects far more than the structure itself—it also includes liability protection, coverage for your belongings, and help with living expenses if your home becomes temporarily uninhabitable. With average rebuild costs now exceeding $320,000, going without coverage is a serious gamble.

Myth #7: “My auto insurance automatically applies to rental cars.”

The truth: Many auto policies do extend to rental vehicles, but usually only for personal trips. Business rentals or commercial‑use situations often fall outside your standard coverage. Before you turn down the rental company’s insurance option, it’s smart to verify what your existing policy includes.

Myth #8: “My credit score doesn’t affect my insurance premiums.”

The truth: In a number of states, insurers use a credit‑based score as part of their rate calculations. The idea is that certain credit patterns statistically correlate with risk. If your credit has improved recently, it may be worth checking in with your agent—you could qualify for better pricing.

Quick Ways to Prevent Coverage Gaps

Being proactive about your insurance can help you avoid costly issues down the road. A few helpful habits include:

• Reviewing your policy once a year, especially after major life events.
• Asking your agent about exclusions so you understand what isn’t covered.
• Keeping an updated list or photos of your belongings in case you need to file a claim later.
• Knowing whether your policy uses “replacement cost” or “actual cash value,” as this affects claim payouts.

A good test is to ask yourself, “Would I be financially prepared if I had to file a claim tomorrow?”

When to Revisit Your Coverage

Your life changes—and your insurance should keep pace. It’s a good idea to reassess your policies when:

• You buy or sell a home or car.
• You complete significant renovations or upgrades.
• You get married, divorced, or welcome a child.
• A new driver joins the household (especially teens!).
• You launch a business or take on a side gig.
• Your income, credit situation, or financial goals shift.

Whether you’ve held onto one of these myths or simply want clarity about your coverage, now is a great time to take a closer look. We’re here to help you understand your options and eliminate any gaps before they become problems. Reach out anytime for a quick, friendly, no‑pressure policy review.