With Debunking Day coming up on March 11th, there’s no better opportunity to clear up some of the biggest misunderstandings about home and auto insurance. Many people still rely on assumptions or outdated information when it comes to their policies, and those misconceptions can lead to costly surprises when they need coverage the most.

To help you stay better informed, 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 reality: The color of your car has zero impact on your insurance rate. Insurers don’t factor paint color into their pricing at all. Instead, they look at details like the vehicle’s age, make and model, engine size, available safety features, your driving history, and how frequently and where you drive. Color simply isn’t part of the equation.

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

The reality: Flooding can occur anywhere—not just in high-risk areas. In fact, roughly one-quarter of all flood insurance claims come from outside official flood zones. And here’s something many people don’t realize: standard homeowners insurance typically excludes flood-related damage. If your area gets rain, it’s worth considering flood coverage to protect your home and belongings.

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

The reality: While older vehicles may not be worth as much as new ones, that doesn’t mean insurance becomes unnecessary. Most states still require liability insurance regardless of age. And if you depend on your car for daily life and couldn’t easily pay for repairs or replacement after an accident, keeping collision and comprehensive coverage could still be a smart move.

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

The reality: Homeowners insurance does include personal property coverage, but there are limits. Typically, that coverage is capped at a percentage of your home’s insured value. High-value items such as jewelry, collectibles, artwork, or premium electronics may exceed standard limits. To fully protect them, you may need to add special endorsements or separate scheduled policies.

Myth #5: “Anyone who borrows my car is automatically insured.”

The reality: Coverage doesn’t always extend as far as you might think. While many policies include some protection for occasional drivers with your permission, there are exceptions—especially for business use, deliveries, and ridesharing. If someone consistently uses your vehicle or drives it for work, it’s important to confirm how your policy handles those scenarios.

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

The reality: Even a well-padded emergency fund may not be enough to absorb the cost of a major loss. Homeowners coverage doesn’t just pay for repairs or rebuilding; it also includes liability protection, coverage for personal property, and support for living expenses if your home becomes uninhabitable. With the average rebuild cost now topping $320,000, skipping insurance could put you at serious financial risk.

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

The reality: Many auto policies extend coverage to rental vehicles, but usually only for personal, non-business use. If you rent a car while traveling for work—or for any commercial purpose—your personal policy may not apply. Before declining the insurance offered by the rental agency, it’s best to verify exactly what your policy includes.

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

The reality: In many states, insurers consider a credit-based insurance score when determining rates. These scores help predict risk levels based on financial behavior. If your credit has improved recently, it may be worth contacting your agent—you could qualify for a lower premium.

Smart Ways to Prevent Coverage Gaps

Staying informed and proactive about your insurance can help you avoid unexpected expenses later. A few helpful habits include:

• Review your policy every year, especially after major life or property changes.
• Talk with your agent about what isn’t covered so you’re never caught off guard.
• Keep an updated inventory of your belongings—and photos or details about your vehicles—to simplify claims.
• Make sure you understand the difference between “replacement cost” and “actual cash value,” as it can significantly affect your payout.
• Ask yourself whether you’d be financially prepared to file a claim if something happened tomorrow.

When to Revisit Your Insurance Coverage

Life changes quickly, and your insurance should adapt along with it. Consider reviewing your policy when:

• You buy or sell a home or a vehicle
• You complete renovations or major upgrades
• You get married, divorced, or welcome a child
• A teen or new driver joins your household
• You start a new business or side gig
• Your income, credit score, or overall financial situation shifts

Whether you’ve believed one of these myths or simply want more clarity about your coverage, now is a great time to take a closer look. We’re here to help you make confident, informed choices and avoid any gaps that could leave you vulnerable.

Reach out anytime to schedule a friendly, no-pressure policy review.