8 Insurance Myths That Could Leave You Unprotected

March 11th is recognized as Debunking Day, making it an ideal moment to clear up some long-standing misunderstandings about home and auto insurance. Many people make decisions based on outdated assumptions or misinformation, which can lead to costly surprises when they need coverage the most.

To help you stay informed and better protected, here is a fresh look at eight common insurance myths—and what the facts really reveal.

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

The reality is that insurers don’t consider the color of your vehicle at all when determining your premium. Whether your car is red, white, black, or any other shade, it makes no difference. Instead, companies look at details such as the vehicle’s make and model, age, engine size, safety features, driving history, and how frequently you’re on the road. Color simply isn’t part of the equation.

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

Flooding can happen almost anywhere, even in neighborhoods that are not officially classified as high-risk. In fact, roughly a quarter of flood-related insurance claims originate outside of designated flood zones. It’s also important to note that most standard homeowners policies do not include flood coverage. If your area experiences rainfall—which is virtually everywhere—it’s worth evaluating whether flood insurance is a smart addition for your home.

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

While older vehicles do lose value over time, that doesn’t automatically mean you should drop important protections. Most states still require liability coverage regardless of how old your vehicle is. Plus, if you rely on your car daily and would struggle to cover repair or replacement costs after an accident, maintaining collision and comprehensive coverage could be essential for your financial security.

Myth #4: “Homeowners insurance covers everything I own.”

Homeowners policies do include personal property coverage, but this protection usually has limits tied to the insured value of your home. High-value items—such as fine jewelry, art collections, rare memorabilia, or advanced electronic equipment—often exceed those limits. To make sure these belongings are fully covered, you may need to add special endorsements or separate policies designed for valuable items.

Myth #5: “Anybody who uses my car is automatically covered.”

Coverage isn’t always guaranteed for anyone who gets behind the wheel of your vehicle. While many policies allow for occasional use with your permission, there are exceptions. Business use, delivery driving, and rideshare activity are common scenarios where coverage may be limited or excluded. If someone drives your car routinely or uses it for work, it’s important to confirm that your policy accounts for that regular use.

Myth #6: “Good savings eliminate the need for homeowners insurance.”

A strong savings account is a great safety net, but even substantial funds may not be enough to handle a major loss. Homeowners insurance covers far more than just the cost to rebuild your property. It includes protection for personal items, liability coverage in case someone is injured on your property, and assistance with housing if your home becomes unlivable after a covered event. Considering the average rebuild cost now exceeds $320,000, skipping insurance is a significant gamble.

Myth #7: “My auto insurance will always cover a rental car.”

Many auto policies extend to rental vehicles, but usually only for personal use. If you rent a vehicle for professional travel, business activities, or commercial purposes, your personal auto policy may not apply. Before turning down the rental company’s offered coverage, it’s wise to verify whether your policy will protect you in that specific situation.

Myth #8: “Insurance rates aren’t affected by credit score.”

In numerous states, insurers use a credit-based insurance score to help determine premiums. The reasoning stems from statistical patterns showing how credit behavior can correlate with risk. If your credit has recently improved, it may be a good time to reach out to your agent—your updated score could potentially help lower your rate.

Tips to Avoid Unwanted Coverage Gaps

Staying proactive can make a big difference when it comes to protecting your home, vehicle, and finances. Here are some smart habits to adopt:

• Look over your policy every year, especially after significant life changes.
• Ask your agent about exclusions so you fully understand what's not included.
• Document your belongings with photos and item details to simplify a future claim.
• Know the difference between replacement cost and actual cash value—your payout depends on it.

It’s also helpful to periodically ask yourself whether you’d be financially prepared if a claim needed to be filed tomorrow.

When to Reevaluate Your Coverage

Life moves quickly, and your insurance should evolve with it. Consider reviewing your policies when:

• You buy or sell a home or vehicle
• You complete renovations or major upgrades
• You get married, divorced, or welcome a child
• A teen or new driver begins using your vehicle
• You start a new business or take on a side gig
• Your financial situation, income, or credit score changes

Whether you once believed these myths or just want reassurance that your coverage still fits your needs, now is a great time to take a closer look. We’re here to help you understand your options, close any gaps, and feel confident about your protection moving forward.