8 Common Insurance Myths That Could Leave You Unprotected

Debunking Day arrives every March 11th, making it the perfect opportunity to clear up some confusion around home and auto insurance. Many people make decisions based on assumptions or outdated information, and that can lead to painful financial surprises when something goes wrong.

To help you stay protected, we’re breaking down eight well‑known insurance myths—and what you should actually believe 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 red, black, or neon green, insurers don’t factor color into their pricing. What they do consider includes your car’s age, its model and engine type, safety features, your driving habits, and your driving history. Color never enters the equation.

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

The truth: Flooding can happen almost anywhere. Roughly a quarter of all flood insurance claims come from outside designated high‑risk areas. Even more important, most standard homeowners policies don’t cover flood damage at all. If your area receives rainfall—which is nearly everywhere—flood insurance is worth thinking about.

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

The truth: While older vehicles may not hold as much monetary value, there are still important coverage considerations. Nearly every state requires liability coverage, no matter how old your car is. And if you depend on your vehicle and couldn’t easily pay for major repairs or a replacement, it may still make sense to carry collision and comprehensive coverage.

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

The truth: Homeowners insurance includes protection for personal belongings, but this coverage usually has a limit tied to your home’s insured value. High‑value items—such as jewelry, collectibles, and expensive electronics—can exceed those limits quickly. To fully protect them, you may need separate scheduled coverage or special endorsements.

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

The truth: Coverage does not automatically extend to every situation. Occasional drivers with your permission may be covered, but business use, deliveries, or rideshare driving often fall outside the scope of a standard policy. If someone regularly uses your vehicle—or drives it for work—you’ll want to make sure your policy reflects that.

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

The truth: Even a solid emergency fund may not be enough to handle the financial impact of a major loss. Homeowners insurance covers far more than the structure itself. It also includes liability protection, coverage for personal belongings, and additional living expenses if your home becomes uninhabitable. With the average price to rebuild a home exceeding $320,000, skipping insurance is an enormous risk.

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

The truth: Personal auto policies often extend to rental cars—but usually only for personal use. If you rent a vehicle for work travel or other commercial reasons, your coverage might not carry over. Before you decline the rental company’s insurance, double‑check how your policy handles rentals.

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

The truth: Many states allow insurers to use credit‑based insurance scores when determining premiums. This is because certain credit patterns statistically correlate with risk. If your credit score has recently improved, it’s worth discussing with your agent—you may qualify for a better rate.

Smart Ways to Avoid Coverage Gaps

Staying ahead of potential coverage issues can save you from major stress down the road. Here are a few simple habits that help keep your protection up to date:

• Look over your policy once a year, especially after major life or property changes.
• Ask your agent to explain exclusions—knowing what isn’t covered is just as important as knowing what is.
• Document your belongings or keep updated photos and values of your vehicle to make claims easier.
• Understand the difference between “replacement cost” and “actual cash value,” as this can dramatically affect your payout after a loss.
• Reflect on whether you could financially manage a claim if it happened tomorrow.

When You Should Revisit Your Insurance Coverage

Your life evolves—and your insurance should evolve with it. Review your policies when any of the following occur:

• You buy or sell a home or car.
• You complete a renovation or significant upgrade.
• You get married, divorced, or welcome a child.
• A teen or new driver joins your household.
• You begin a side business or new work venture.
• Your financial situation changes, whether through income, credit score, or savings adjustments.

Whether you’ve fallen for one of these myths or simply want to confirm that your coverage still fits your needs, now is a great time to review your policies. We’re here to help you make confident, informed decisions and avoid unexpected coverage gaps.

Reach out anytime to schedule a simple, no‑pressure policy review.