With Debunking Day coming up on March 11th, there’s no better moment to clear up some long-standing misunderstandings about home and auto insurance. Many people make decisions based on assumptions or outdated information, and those misconceptions can lead to costly surprises when it’s time to file a claim.
To help you stay protected and confident in your coverage, here’s a fresh look at eight widespread insurance myths—and what’s actually true.
Myth #1: “Red cars cost more to insure.”
The truth:
The color of your car has zero influence on your insurance rate. Whether your vehicle is red, blue, black, or lime green, insurers don’t factor the paint color into their pricing. What they do
consider includes the age of your vehicle, its make and model, safety features, how often you drive, where you drive, and of course, your driving record. Color simply isn’t part of the equation.
Myth #2: “If I’m not in a flood zone, I don’t need flood insurance.”
The truth:
Flooding isn’t exclusive to high-risk zones. About one out of every four flood insurance claims actually comes from homeowners outside those designated areas. Even more importantly, standard homeowners insurance policies usually don’t
cover flood damage. If you live in an area where it rains—which is nearly everywhere—it’s worth considering whether flood coverage belongs in your protection plan.
Myth #3: “An older car doesn’t need full coverage.”
The truth:
While older vehicles may have lower market value, that doesn’t automatically mean you should drop certain coverages. Liability insurance is still required in most states, no matter how old your vehicle is. And if you depend on your car and wouldn’t be able to cover the cost of repairs or a total loss out of pocket, collision and comprehensive insurance might still be crucial for your financial safety.
Myth #4: “My homeowners policy covers all my belongings.”
The truth:
Homeowners policies do include personal property coverage, but those limits may not stretch as far as you think. Typically, coverage is capped at a percentage of your home’s insured value. High-value items—such as jewelry, collectibles, or premium electronics—can easily exceed these limits. To fully insure items like these, you may need to add a scheduled personal property endorsement or a separate rider.
Myth #5: “Anyone who drives my car is automatically covered.”
The truth:
Coverage for other drivers isn’t guaranteed across all situations. While occasional drivers with your permission may be covered, your policy may exclude or limit coverage when a vehicle is used for business activities—such as delivery work, ridesharing, or commercial errands. If someone else regularly drives your car or uses it for their job, it’s important to confirm how your policy handles those scenarios.
Myth #6: “I don’t need homeowners insurance if I have savings.”
The truth:
Even a strong emergency fund may not be enough to absorb the financial shock of a major home-related incident. Homeowners insurance doesn’t just cover the physical structure—it also includes liability protection, coverage for personal belongings, and help with living expenses if your home becomes temporarily uninhabitable. With the average rebuild cost now over $320,000, self-insuring is a risky move.
Myth #7: “My auto insurance always applies to rental cars.”
The truth:
Personal auto insurance often extends to rental cars, but typically only for personal use. If you’re renting a vehicle for a work trip or commercial purposes, your personal policy may not apply. Before you decline the rental company’s insurance, double-check to make sure you’re actually covered under your own policy.
Myth #8: “My credit score has nothing to do with my insurance rates.”
The truth:
In many states, insurers use a credit-based insurance score as part of their rating process. Historical data shows that credit behavior can correlate with claims risk. If your credit has improved, it may be worth asking your insurance agent to review whether you qualify for lower premiums.
Tips to Prevent Unexpected Coverage Gaps
Taking a proactive approach to your insurance can help you avoid unpleasant surprises down the road. Try incorporating these practices into your routine:
- Review your policies once a year—especially after major milestones or life changes.
- Ask your agent to explain exclusions so you know exactly what isn’t covered.
- Document your belongings or vehicle details to simplify future claims.
- Learn the difference between “replacement cost” and “actual cash value”—this can greatly affect your payout.
- Check in with yourself: “If I had to file a claim tomorrow, would I be financially prepared?”
When to Revisit Your Policies
Your insurance should evolve as your life changes. Consider reviewing your coverage during moments like:
- Buying or selling a home or car
- Completing a renovation or major upgrade
- Getting married, divorced, or welcoming a new child
- Adding a new driver to your household—especially a teen
- Starting a small business or side venture
- Experiencing shifts in income, credit score, or financial priorities
Whether you’ve believed some of these common myths or simply want peace of mind, now is a great time to take a closer look at your coverage. We’re here to help you make smart, informed decisions and ensure there are no hidden gaps in your protection.
If you'd like a quick, friendly policy review with no pressure, feel free to reach out—we’re always happy to help.
