8 Common Insurance Myths You Should Stop Believing

March 11th is Debunking Day, making it the perfect moment to clear up some long-standing confusion around home and auto insurance. Many people base their coverage decisions on information that is outdated, oversimplified, or flat-out incorrect. Unfortunately, misunderstandings like these can create costly gaps when the unexpected happens.

To help you stay protected, here’s a fresh look at eight widespread insurance myths—and the real facts you should keep in mind.

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

The truth: Your car’s paint color has zero influence on your insurance rate. Auto insurers focus on details such as the car’s make, model, age, safety features, engine size, how often you drive, and your driving record. Whether your car is red, blue, or neon green, color plays no role in determining your premium.

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

The truth: Flooding isn’t limited to high‑risk regions. Roughly one-quarter of all flood insurance claims actually come from areas outside designated flood zones. Standard homeowners policies do not cover flood damage, so if your area gets rain, flood insurance is worth considering—even if your home isn’t labeled high-risk.

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

The truth: Even if your car has depreciated, the decision to carry more than liability coverage depends on your situation. Most states require liability insurance regardless of vehicle age. And if you rely heavily on your car—or couldn’t afford major repair costs or a replacement after an accident—collision and comprehensive coverage may still be valuable.

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

The truth: Homeowners insurance does include personal property protection, but those limits only extend so far. High-value or specialty items—such as fine jewelry, rare collectibles, or premium electronics—can exceed standard limits. To ensure full protection, these items may need to be individually insured through endorsements or separate policies.

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

The truth: Coverage for other drivers isn’t guaranteed across all situations. Many policies extend protection to occasional drivers with your permission, but there are restrictions—especially for business use, delivery activity, or ridesharing. If someone drives your car regularly or uses it for work, verify with your insurer that they’re properly covered.

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

The truth: Even a solid financial cushion may not cover the cost of a major disaster. Homeowners insurance includes far more than structural protection—it also covers liability, personal belongings, and additional living expenses if your home becomes temporarily uninhabitable. With the average home rebuild cost now exceeding $320,000, skipping insurance is a significant gamble.

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

The truth: Many personal auto policies extend to rental vehicles, but usually only for personal trips. If you’re renting a car for business reasons, your own insurance may not apply. Before declining the rental company’s coverage, it’s always smart to double-check what your policy does—or doesn’t—cover.

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

The truth: In many states, insurers use credit-based insurance scores to help calculate premiums. This practice exists because certain credit patterns have been statistically linked to risk levels. If your credit has improved recently, it may be worth checking in with your agent—you could qualify for better rates.

Quick Tips to Prevent Coverage Gaps

Taking a proactive approach to your coverage can make a big difference when you need it most. Consider these helpful steps:

• Review your policy each year—especially after major life changes.
• Ask your agent about exclusions so you understand exactly what isn’t covered.
• Keep a home inventory or maintain photos and values of your belongings or vehicle.
• Learn the difference between “replacement cost” and “actual cash value,” since this affects claim payouts.

It can also be helpful to ask yourself: “If I had to file a claim tomorrow, would I be financially prepared?”

When to Revisit Your Coverage

Life evolves quickly, and your insurance should evolve with it. You may want to reassess your policies when:

• You buy or sell a home or vehicle.
• You finish a renovation or significant upgrade.
• You get married, divorced, or welcome a new child.
• A new driver joins your household—especially a teen.
• You start a business or take on side‑work that affects coverage needs.
• Your credit score, income, or overall financial situation changes.

Whether you’ve believed one of these myths in the past or simply want to ensure your coverage still fits your life, now is a great time to take a closer look. Staying informed is one of the best ways to avoid costly surprises down the road.

We’re here to help you review your policies and make confident decisions. Reach out anytime to schedule a simple, no-pressure insurance check‑in.