8 Common Insurance Myths That Could Leave You Unprotected

March 11th is Debunking Day, making it the perfect moment to sort fact from fiction when it comes to common misunderstandings about home and auto insurance. Many people make decisions based on assumptions or outdated information, and those misconceptions can lead to unpleasant surprises when it’s time to file a claim.

To help you stay protected, here’s a fresh look at eight insurance myths that continue to circulate — and the truths you should rely on instead.

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

The truth: The color of your vehicle has zero impact on your insurance rate. Insurers don’t consider paint color at all. What actually influences premiums are things like your car’s make and model, its age, safety features, how you use the vehicle, and your driving record. Red, blue, green — it makes no difference.

Myth #2: “Only people in flood zones need flood insurance.”

The truth: Flooding can occur almost anywhere, not just in high‑risk zones. Around one-quarter of all flood insurance claims originate from areas that aren’t classified as high-risk. Even more important, standard homeowners insurance typically does not cover flood damage. If your area gets rain, it’s worth considering whether flood protection belongs in your coverage plan.

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

The truth: Even if your vehicle has aged and depreciated, certain protections may still be necessary. Most states legally require liability coverage regardless of a car’s age. And if you rely on your vehicle for daily transportation, you may still want comprehensive and collision insurance to avoid paying out of pocket for major repairs or total loss after an accident.

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

The truth: Homeowners insurance provides personal property protection, but the coverage typically comes with limits tied to your home’s insured value. High-cost possessions — such as fine jewelry, collectibles, rare items, or premium electronics — may exceed those limits. To ensure full protection, you may need to add separate endorsements or schedule those belongings individually.

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

The truth: Coverage isn’t universal for every driver who gets behind your wheel. While many policies extend coverage to occasional drivers with your permission, that coverage has boundaries. Business-related driving, delivery work, and rideshare use may not be included. If someone frequently borrows your vehicle or drives it for work, double-check that your policy fully protects them.

Myth #6: “A strong savings account means I don’t need homeowners insurance.”

The truth: Savings alone may not be enough to recover from a significant loss. Homeowners insurance offers multiple layers of protection beyond the structure itself: liability coverage, temporary housing if your home becomes uninhabitable, and protection for personal belongings. With the average rebuilding cost now exceeding $320,000, skipping insurance exposes you to tremendous financial risk.

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

The truth: Many auto policies extend to rental vehicles, but usually only when used for personal reasons. If you’re renting a car for business or commercial needs, your personal policy may not apply. Always check your coverage details before turning down the rental agency’s insurance options.

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

The truth: In many states, insurers use a credit-based insurance score as part of their pricing calculations. These scores help predict risk based on patterns in financial behavior. If your credit rating has gotten stronger recently, it may be worth asking your agent whether your improved score could positively impact your premium.

Quick Tips to Prevent Coverage Gaps

Being intentional with your insurance choices can help you avoid unwelcome surprises. Try incorporating these smart habits:

• Review your insurance policies each year, especially after major lifestyle or property changes.
• Talk with your agent about exclusions so you understand exactly what isn’t covered.
• Create an inventory of your belongings — even photos or estimated values can make future claims easier.
• Learn the difference between “replacement cost” and “actual cash value,” as this distinction can impact how much you receive after a loss.
• Ask yourself whether you’d be financially prepared to handle a claim if it happened tomorrow.

When to Reevaluate Your Coverage

Your life evolves, and your insurance should grow with it. Here are key moments when revisiting your policy is especially important:

• You buy or sell a home or vehicle.
• You complete renovations or invest in significant upgrades.
• You experience major family changes such as marriage, divorce, or welcoming a child.
• A new driver joins your household — especially a teen.
• You begin a business or start earning income from a side gig.
• Your financial situation, credit score, or overall income shifts noticeably.

Whether you’ve believed one of these myths yourself or simply want to make sure your coverage fits your life today, now is an excellent time to take another look. We’re here to help you understand your options and close any gaps in protection. Reach out whenever you’re ready to schedule a friendly, no-pressure policy review.