March 11th is Debunking Day, which makes it the perfect moment to clear up some long-standing misconceptions about home and auto insurance. Many people make decisions based on information that’s outdated, oversimplified, or just plain wrong—and unfortunately, those misunderstandings can lead to major financial trouble when a claim arises.

Below, we’re breaking down eight persistent insurance myths and explaining what’s actually true so you can feel confident in the coverage you carry.

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

 

The reality: Your car’s paint color has zero influence on your insurance rate. Insurers focus on details that affect risk—think your vehicle’s make and model, age, safety features, engine size, how often you drive, and your driving record. The color? It never factors into your premium.

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

 

The reality: Flooding can occur almost anywhere, not just in designated high‑risk zones. In fact, around a quarter of flood claims come from properties located outside those areas. And here’s something many people don’t realize: most homeowners policies do not include flood damage. If rain is a regular part of your weather forecast, flood coverage is worth considering.

Myth #3: “My older car isn’t valuable enough for full coverage.”

 

The reality: While aging vehicles do decrease in value, that doesn’t automatically mean you should drop coverage. Liability insurance is still required in most states. And if you rely heavily on your car—or couldn’t easily cover major repairs or a replacement—keeping collision and comprehensive insurance could save you from an expensive setback after an accident.

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

 

The reality: Homeowners insurance typically protects personal belongings, but only up to a certain limit, usually tied to a percentage of your home’s insured value. High-value items—such as fine jewelry, rare collectibles, or premium electronics—may exceed those limits. To fully protect these items, you may need to schedule them separately through endorsements or additional policies.

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

 

The reality: Coverage for other drivers isn’t always automatic. While many policies extend protection to occasional drivers you give permission to, there are notable limitations. Business use, gig‑economy driving, or someone who uses your car regularly can all complicate coverage. If another driver consistently gets behind the wheel, it’s important to confirm they’re properly included in your policy.

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

 

The reality: Even a solid financial cushion may not be enough to cover the full impact of a disaster. Homeowners insurance offers more than property protection—it includes liability coverage if someone gets hurt on your property, loss of use if you can’t live in your home temporarily, and coverage for your belongings. Considering that rebuilding a home now averages more than $320,000, going uninsured poses a significant risk.

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

 

The reality: Many personal policies do extend to rental cars, but only when they’re being used for personal reasons. If you’re renting for business travel or commercial purposes, your standard policy may not apply. Always confirm before declining additional coverage at the rental counter.

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

 

The reality: In many states, insurers use a credit-based insurance score when determining rates. These scores can predict risk patterns, which means better credit can sometimes translate to lower premiums. If your credit has improved recently, it might be time to check in with your agent to see whether your rate could be reduced.

Smart Ways to Avoid Coverage Gaps

 

Staying ahead of potential coverage issues can save you money—and stress—down the road. Here are some practical steps to keep you protected:

• Give your policy a yearly checkup, especially after major life events.
• Ask your agent about exclusions, so you know exactly what isn’t covered.
• Document your belongings with photos or a digital inventory to make claims easier.
• Learn the difference between actual cash value and replacement cost, since it affects how much you’ll receive after a loss.
• Consider whether you could financially handle a claim tomorrow—your answer may reveal where coverage needs adjusting.

When You Should Review Your Insurance Policy

 

Your life doesn’t stay the same—and your insurance shouldn’t either. Make it a priority to revisit your policy when:

• You buy or sell a car or home
• You complete renovations or major upgrades
• You experience a change in family status, such as marriage, divorce, or the arrival of a child
• A new driver joins your household (especially teen drivers!)
• You begin a business or side gig
• Your income, credit score, or financial situation shifts

Whether you've heard one of these myths before or simply want to ensure your policies still fit your needs, there’s no better time to take a closer look. We’re here to help you stay informed, make confident decisions, and avoid unwelcome surprises in your coverage.

Reach out anytime to schedule a quick, pressure-free review of your policies—we’re always happy to help.