8 Common Insurance Myths That Could Leave You Vulnerable

March 11th is Debunking Day, making it the perfect opportunity to clear up some of the biggest misconceptions surrounding home and auto insurance. Many people make decisions based on outdated assumptions or misleading information, and unfortunately, that can leave them exposed when something unexpected happens.

To help you stay protected, we’ve taken a closer look at eight persistent insurance myths—along with the facts you should rely on instead.

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

The reality: The color of your car has no impact on your insurance premium. Whether your vehicle is red, black, blue, or neon yellow, insurers don’t consider color in their calculations. What they do look at are details such as the vehicle's age, make and model, engine size, safety features, how frequently it’s driven, and your driving record. Color doesn’t play a role at any point.

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

The reality: Flooding can affect almost any area, not just designated high-risk zones. In fact, roughly one-quarter of flood claims come from homes located outside those zones. It’s also important to know that standard homeowners insurance typically excludes flood damage. If storms and heavy rain are common in your region, flood insurance may be a wise layer of extra protection.

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

The reality: While older vehicles do lose value over time, liability coverage is still required by law in most states, no matter the age of the car. Even beyond liability, you may still want comprehensive or collision coverage depending on how much you rely on your vehicle and whether you could afford repairs or replacement after an accident. The age of the car is only one factor—your financial comfort level matters just as much.

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

The reality: Homeowners insurance includes personal property protection, but only up to certain limits. High-value items—like fine jewelry, rare collectibles, expensive electronics, or specialized equipment—may exceed those limits. To fully safeguard these belongings, many homeowners purchase separate riders or endorsements that specifically cover these items in greater detail.

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

The reality: Coverage doesn’t always extend to every driver in every situation. Occasional use with your permission is often covered, but things get more complicated with business travel, delivery work, or rideshare driving. If someone regularly drives your car—or uses it for commercial purposes—you’ll want to confirm they’re properly listed or insured under your policy.

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

The reality: Even a strong savings account may not be enough to protect you from the financial shock of a major loss. Home insurance covers much more than the physical structure of your house. It includes liability protection if someone gets hurt on your property, coverage for personal belongings, and even the cost of temporary housing if your home becomes unusable. With rebuild costs now averaging more than $320,000, going without coverage is a significant gamble.

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

The reality: Many personal policies do offer coverage for rental cars—but usually only for personal use. If you’re renting for business, work travel, or commercial purposes, your personal auto policy may not apply. It’s always a good idea to check your coverage before you decline the rental company’s insurance options.

Myth #8: “My credit score doesn’t impact my insurance rate.”

The reality: In numerous states, insurers use a credit-based insurance score when setting premiums. These scores help predict risk, based on long-term data trends. If your credit has recently improved, it may be worth reaching out to your agent—you could qualify for a better rate.

Tips to Prevent Costly Coverage Gaps

Being proactive with your insurance can save you stress and money in the long run. Here are a few ways to stay on top of your coverage:

• Review your policies once a year, especially after major life events.
• Ask your agent about exclusions so you understand what isn’t covered.
• Keep an inventory of your belongings or photos of your vehicle and valuables to simplify claims.
• Learn the difference between “replacement cost” and “actual cash value” to understand how payouts work.
• Ask yourself: “If I had to file a claim tomorrow, would I be financially prepared?”

When You Should Revisit Your Policy

Your needs evolve over time—and your insurance should evolve with them. Review your policies when:

• You purchase or sell a home or vehicle.
• You complete a major renovation or upgrade.
• Your family dynamic changes due to marriage, divorce, or the addition of a child.
• A new driver (especially a teen) joins the household.
• You start a business or side gig that could affect your coverage.
• Your income, credit score, or broader financial circumstances shift.

Whether you’ve believed one of these myths in the past or simply want to ensure your policies still fit your needs, now is a great time to review your coverage. Our team is here to help you understand your options, identify potential gaps, and make confident, informed decisions about your protection. Reach out anytime for a quick, pressure‑free policy review.