8 Common Insurance Myths That Could Leave You Unprotected

March 11th is Debunking Day, making it the perfect moment to clear up some widespread confusion around home and auto insurance. Many people still base their decisions on outdated assumptions, and unfortunately, those misconceptions can translate into costly surprises when a claim arises.

To help you stay properly protected, here’s a fresh look at eight long-standing insurance myths—and what the facts really show.

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

The truth: The color of your car has zero impact on your insurance rate. Whether your vehicle is red, blue, black, or lime green, insurers don’t factor color into premium calculations. What does matter are details like year, make and model, safety ratings, engine type, your driving record, and how often you’re on the road. Color simply doesn’t enter the equation.

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

The truth: Flooding isn’t exclusive to high-risk areas. Roughly one-quarter of all flood claims come from properties outside designated flood zones. Even more surprising? Standard homeowners policies typically exclude flood damage. If your area gets rain—and nearly all do—it’s worth exploring a flood policy.

Myth #3: “My older car doesn’t need full coverage.”

The truth: While older vehicles lose value over time, that doesn’t automatically mean you should drop important coverage. Most states still require liability insurance regardless of a car’s age. And if you depend on your vehicle for daily life, comprehensive and collision coverage may still be crucial. Without them, a major repair or total loss could hit your budget hard.

Myth #4: “My homeowners insurance covers everything I own.”

The truth: Homeowners policies do include personal property protection, but the coverage often has limits tied to the insured value of your home. High-value items—like jewelry, collectibles, specialty equipment, or luxury electronics—may exceed those caps. To fully insure these belongings, you may need separate scheduled coverage or specific endorsements.

Myth #5: “Anyone who drives my car is automatically insured.”

The truth: Coverage for other drivers isn’t guaranteed. Many policies extend protection to people who occasionally borrow your car with permission, but there are notable exceptions. Business use, ridesharing, and delivery driving often fall outside typical coverage. And if someone regularly uses your car, they may need to be listed on your policy to be protected.

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

The truth: Even robust savings may not be enough to cover the aftermath of a significant loss. Homeowners insurance provides more than property protection—it also includes liability coverage, loss-of-use benefits if you need temporary housing, and coverage for personal items. Considering the average rebuild cost now exceeds $320,000, going without insurance could be an enormous gamble.

Myth #7: “Rental cars are automatically covered under my auto policy.”

The truth: Many personal auto policies do extend to rental cars, but usually only for personal travel. If you’re renting a vehicle for business-related reasons, your coverage might not apply. Before declining the rental company’s insurance, it’s wise to double-check your policy or ask your agent.

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

The truth: In numerous states, insurers use a credit-based insurance score as part of determining your premium. This is because credit patterns can statistically reflect risk. If your credit habits have improved recently, it may be worth contacting your agent—your premiums could potentially decrease.

Quick Tips to Prevent Coverage Gaps

Staying on top of your coverage can help you avoid unwelcome surprises down the road. Consider these simple ways to ensure your policies stay up to date:

• Review your insurance annually, especially after major life events or purchases.
• Ask your agent to explain policy exclusions—understanding what isn’t covered is just as important as knowing what is.
• Keep an updated inventory of your belongings or photos of your vehicle to simplify future claims.
• Learn the difference between “replacement cost” and “actual cash value” so you understand how payouts are calculated.

One helpful question to keep in mind: Would I be financially prepared if I needed to file a claim tomorrow?

When to Reevaluate Your Insurance Coverage

As your life evolves, your insurance should follow suit. It’s a good idea to revisit your policies when:

• You buy or sell a home or vehicle.
• You complete a remodel or significant upgrade.
• You get married, divorced, or welcome a new child.
• A teenager or new driver joins the household.
• You launch a business or begin a side gig.
• Your income, credit score, or broader financial situation shifts.

Whether you’ve held onto one of these myths or simply want reassurance that your coverage still matches your needs, now’s an excellent time to take a closer look. We’re here to help you navigate your options, understand your protection, and avoid unexpected gaps.

Reach out anytime to schedule an easy, no-pressure policy review.