With Debunking Day coming up on March 11th, there’s no better moment to clear up some long-standing misconceptions about home and auto insurance. Many people still rely on outdated assumptions or hearsay, and those misunderstandings can lead to costly surprises when you need coverage the most.

Below, we’re breaking down eight persistent insurance myths and explaining what’s actually true—so you can stay confident, informed, and protected.

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

 

The truth: The color of your car has absolutely no impact on your insurance premium. Whether your vehicle is red, blue, black, or neon green, insurers aren’t factoring color into your rate. What they do consider includes your vehicle’s age, model, safety features, how far you drive, where you live, and your driving record. Color never makes the list.

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

 

The truth: Flooding can occur just about anywhere. Surprisingly, around 25% of flood insurance claims originate outside designated high-risk flood zones. Even more important, most standard homeowners policies don’t cover flood damage at all. If storms or heavy rainfall are common where you live, it’s worth exploring a flood policy—regardless of your zone classification.

Myth #3: “My older car isn’t worth full coverage.”

 

The truth: Older vehicles may decline in value, but that doesn’t automatically mean you should drop coverage. In most states, liability insurance is required regardless of how old your car is. If you rely heavily on your vehicle and couldn’t easily pay for major repairs or a replacement after an accident, collision and comprehensive coverage may still be essential. Protection isn’t just about your car’s value—it’s about your financial stability.

Myth #4: “My homeowners policy covers all my belongings.”

 

The truth: While homeowners insurance includes personal property coverage, there are limits based on a percentage of your total insured value. High-value items—like fine jewelry, collectible items, or expensive electronics—may exceed those standard limits. To fully protect these valuables, you may need additional coverage, such as scheduled personal property endorsements, that offer higher and more specific protection.

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

 

The truth: Coverage doesn’t automatically extend to every person who gets behind your wheel. While many policies cover occasional drivers who have your permission, there are limitations. Activities like ridesharing, delivery driving, or frequent use by someone outside your household may not be included. If someone regularly drives your vehicle or uses it for work, verify that they’re properly insured under your policy.

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

 

The truth: Even a strong emergency fund may fall short in the event of a major loss. Homeowners insurance covers far more than the structure of your home—it also protects against liability if someone is hurt on your property, covers personal belongings, and includes loss of use if your home becomes temporarily unlivable. With the average rebuild cost now exceeding $320,000, opting out of homeowners insurance can be an overwhelming financial gamble.

Myth #7: “My car insurance always covers rental vehicles.”

 

The truth: Many auto policies do extend to rental cars, but only for personal use. If you’re renting for business travel or commercial purposes, your personal policy likely won’t apply. Before declining the rental company’s insurance, double-check how and when your personal coverage extends to rentals.

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

 

The truth: In many states, insurers use a credit-based insurance score to help determine premiums. Data shows that certain credit behaviors correlate with risk, which is why your score may influence your rate. If your credit has improved recently, it’s worth checking in with your agent—you may qualify for better pricing.

Quick Tips to Prevent Coverage Gaps

 

Staying ahead of your insurance needs can save you significant stress and expense later. Here are some easy ways to ensure you’re covered:

• Review your policy each year, especially after major life changes.
• Ask your agent to clarify exclusions—knowing what isn’t covered is just as important as knowing what is.
• Document your belongings with photos or a home inventory to simplify future claims.
• Understand the difference between “replacement cost” and “actual cash value,” since it affects your payout after a loss.

It’s also worth reflecting on this simple question: Would I be financially secure if I had to file a claim tomorrow?

Key Moments to Reevaluate Your Coverage

 

Life changes quickly, and your insurance should evolve alongside it. Consider reviewing your policies when:

• You buy or sell a home or vehicle
• You complete a renovation or major upgrade
• You get married, divorced, or welcome a child
• A new driver joins your household
• You launch a business or side hustle
• Your income, credit score, or financial situation shifts significantly

Whether you’ve believed some of these myths or simply want to make sure your coverage still aligns with your needs, now is an ideal time to reassess your policies. We’re here to help you make informed, confident decisions and avoid unexpected gaps.

Reach out anytime to schedule a no-pressure policy review and ensure you’re fully protected.