With Debunking Day coming up on March 11th, it’s the perfect opportunity to clear up some long-standing misunderstandings about home and auto insurance. Many people make decisions based on inaccurate assumptions, and those misconceptions can end up costing them when they need coverage the most.

To help you stay informed and protected, here’s a fresh look at eight widespread insurance myths—and what you should actually believe instead.

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

The truth: The color of your car doesn’t play any role in determining your insurance premium. Insurers focus on details such as the vehicle’s age, make and model, safety ratings, engine specifications, where and how often you drive, and your personal driving history. The shade of paint never enters the equation.

Myth #2: “Flood insurance is only necessary for people in flood zones.”

The truth: Flooding can happen anywhere, not just in designated high-risk areas. In fact, roughly one in four flood claims originates outside of these zones. It’s also important to know that most standard homeowners insurance policies do not cover flood damage. If your area experiences rainfall—which is nearly everywhere—flood insurance is at least worth evaluating.

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

The truth: While an aging vehicle may be worth less, there are still practical considerations. Nearly every state requires drivers to carry liability insurance, no matter how old the car is. And if you depend on your vehicle daily and wouldn’t be able to shoulder repair or replacement costs after an accident, maintaining collision and comprehensive coverage might still be the responsible choice.

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

The truth: Personal property coverage is part of standard homeowners insurance, but there are limits. Typically, coverage only extends up to a set percentage of your home’s insured value. High-end or unique belongings—such as designer jewelry, rare collectibles, or expensive electronics—may exceed those limits. To fully cover these valuables, you might need to add separate endorsements or individual item coverage.

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

The truth: Permission-based coverage exists, but it isn’t universal. Your policy may cover someone who drives your car occasionally with your approval, but there can be restrictions. Situations involving ride-sharing, delivery services, or frequent non-household drivers may require additional coverage or specific policy adjustments. If someone uses your car regularly or for work purposes, it’s best to confirm they’re fully protected.

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

The truth: Even a robust emergency fund may not be enough to handle the financial burden of a major loss. Homeowners insurance doesn’t just protect the structure of your house—it also includes liability coverage if someone is injured on your property, loss of use if your home is temporarily uninhabitable, and protection for your belongings. With the average rebuild cost now exceeding $320,000, skipping insurance is a significant gamble.

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

The truth: Many personal auto policies do extend to rental vehicles, but typically only for personal use. Business-related rentals or commercial-purpose driving often fall outside the scope of standard coverage. Before turning down rental agency insurance, verify exactly what your policy includes.

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

The truth: In many states, insurers do take credit-based insurance scores into account when calculating premiums. These scores have been statistically linked to patterns of financial and behavioral risk. If your credit has recently improved, it’s worth asking your agent whether your premium could be adjusted.

Quick Tips to Prevent Coverage Gaps

Staying ahead of potential issues can save you from major stress down the road. Consider these helpful reminders:

• Look over your policy every year, especially after big life or property changes.
• Have conversations with your agent about policy exclusions—understanding what’s not covered is just as important as knowing what is.
• Create an inventory of your belongings or keep updated photos and values of your vehicle to simplify claims.
• Learn the difference between “replacement cost” and “actual cash value,” as they can meaningfully affect your payout.

It’s also useful to pause and consider: Would you be financially prepared if you needed to file a claim tomorrow?

When You Should Revisit Your Insurance

Life changes quickly, and your coverage should evolve with it. It’s a smart idea to revisit your insurance when:

• You purchase or sell a home or vehicle
• You finish a renovation or major home improvement project
• You experience a family change such as marriage, divorce, or the arrival of a new child
• A new driver—like a teenager—joins your household
• You begin a business or side gig
• Your income, credit score, or financial circumstances shift

Whether you’ve held onto one of these myths or simply want reassurance that your coverage is still the right fit, now is an ideal time to reassess. We’re here to support you as you navigate your options and close any potential gaps. Reach out when you’re ready for a friendly, no-pressure policy review.