8 Insurance Myths That Could Leave You Unprotected

March 11th is Debunking Day, making it the perfect time to clear up some of the most common misunderstandings about home and auto insurance. Many people make decisions based on outdated or inaccurate information, and unfortunately, those assumptions can lead to costly surprises when it really counts.

Below, we break down eight long-standing insurance myths and explain what you should know instead.

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

Despite the rumor, the color of your vehicle has zero impact on what you pay for insurance. Carriers focus on details that actually influence risk, such as the vehicle’s age, make and model, safety features, how far you drive, and your driving history. Color simply isn’t a factor insurers use when setting your premium.

Myth #2: “Flood insurance is only for people in flood zones.”

Flooding can happen almost anywhere, not just in designated high‑risk zones. In fact, roughly a quarter of all flood insurance claims come from areas outside these zones. Even more important: standard homeowners policies typically do not cover flood damage. If your area gets rain—flood insurance is worth evaluating.

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

While older vehicles do depreciate, that doesn’t automatically mean you should drop important protections. Most states still require liability insurance regardless of the car’s age. And if you depend on your vehicle and couldn’t comfortably cover major repairs or a total loss, collision and comprehensive coverage may still be valuable.

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

Homeowners insurance does include personal property coverage, but it typically has limits tied to a percentage of your home’s insured value. High‑value items—such as fine jewelry, rare collectibles, or premium electronics—can exceed those limits. To fully protect these belongings, you may need to schedule them separately or add special endorsements.

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

Your auto policy may extend some coverage to drivers who use your vehicle occasionally with your permission, but that extension has boundaries. Business activities, delivery driving, or rideshare use often require different coverage. If someone frequently drives your vehicle or uses it for work, make sure your policy reflects that.

Myth #6: “Strong savings mean I don’t need homeowners insurance.”

Even a robust emergency fund often isn’t enough to handle the enormous cost of a major loss. Homeowners insurance protects far more than the structure itself—it also covers liability if someone gets hurt on your property, provides loss‑of‑use coverage if you need temporary housing, and helps replace personal belongings. With the average rebuild cost now exceeding $320,000, going without insurance is a major gamble.

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

Many personal auto policies do include rental car coverage—but usually only for personal trips. If you’re renting a car for business purposes, your personal policy may not apply. It’s always best to double‑check your coverage before declining the rental company’s insurance.

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

In many states, insurers use credit‑based insurance scores when determining premiums. Research shows that certain credit behaviors correlate with risk levels. If your credit has improved, it’s worth letting your agent know—your premium may benefit.

Quick Tips to Prevent Coverage Gaps

Taking simple steps now can help protect you from costly issues later. A few smart habits include:

• Reviewing your policy each year, especially after major life changes.
• Asking your agent about exclusions so you know exactly what isn’t covered.
• Keeping an updated inventory of your belongings, including photos and values.
• Understanding the difference between “replacement cost” and “actual cash value,” as each affects your claims payout.

It’s helpful to pause and ask yourself: “If I had to file a claim tomorrow, would I be financially prepared?”

When to Revisit Your Insurance Policy

Your life evolves, and your insurance should evolve with it. Consider reviewing your coverage when:

• You buy or sell a home or vehicle.
• You finish a renovation or major upgrade.
• You get married, divorced, or welcome a child.
• A new driver joins your household—notably teenagers!
• You begin a business or side gig.
• Your income, credit score, or overall financial picture changes.

If you’ve believed one of these myths or simply want reassurance that your coverage still fits your needs, now is a great time to take a closer look. We’re here to help you make confident, informed choices and avoid unexpected gaps in protection. Reach out anytime to schedule a quick, no‑pressure policy review.