Many homeowners and drivers make insurance decisions based on outdated assumptions or misinformation. When those myths go unchecked, they can create costly gaps in coverage at the worst possible time. With Debunking Day on March 11th, it’s the perfect opportunity to clear up some common misconceptions and help you make better, more informed insurance choices. This guide breaks down eight persistent myths and what you should know instead.

Myth #1: Red cars cost more to insure

Despite the popularity of this belief, the color of your car has no influence on your insurance rate. Insurers look at factors such as your car’s model, age, safety features, and engine type. They also consider how often you drive, where you drive, and your driving record. Paint color plays absolutely no role in calculating your premium.

Myth #2: You only need flood insurance if you live in a flood zone

Flooding is not limited to properties in high-risk areas. In reality, roughly 25% of flood claims originate outside of designated flood zones. Standard homeowners insurance typically does not include flood protection, leaving many property owners vulnerable. Anyone who lives in an area where it rains—even occasionally—should at least explore the value of a flood insurance policy.

Myth #3: Older vehicles don’t require full coverage

Although older cars usually decline in value, that doesn’t mean you should automatically drop important coverage. Liability insurance is still required in most states regardless of your vehicle’s age. And if you depend on your car for daily transportation, losing it to an accident without collision or comprehensive protection could create a major financial setback. The age of your vehicle is only one factor to consider.

Myth #4: Homeowners insurance covers all your belongings

Your homeowners policy includes personal property coverage, but it is limited to a percentage of your home’s overall insured value. High-value items like jewelry, collectibles, art, and premium electronics may exceed those limits. To safeguard these belongings fully, you may need to schedule them individually or add policy endorsements that provide expanded protection.

Myth #5: Everyone who drives your car is automatically covered

Coverage is not guaranteed for every driver who gets behind the wheel of your vehicle. While occasional drivers may be protected with your permission, situations involving ridesharing, delivery services, or regular use often fall outside standard coverage rules. If someone consistently drives your car or uses it for business, confirm with your insurer that they’re properly included.

Myth #6: You can skip homeowners insurance if you have strong savings

Even with a solid emergency fund, covering a major loss out of pocket is often unrealistic. Homeowners insurance protects far more than the structure of your home. It typically includes liability protection, coverage for personal items, and help with additional living expenses if your home becomes uninhabitable. Considering the average cost to rebuild a home now exceeds $320,000, choosing to forgo insurance creates significant financial exposure.

Myth #7: Your auto policy always covers rental cars

Many auto policies do extend coverage to rental vehicles, but only when the rental is for personal use. If you rent a car for work or business travel, your personal auto insurance may not apply. Before turning down the rental company’s coverage, verify what your existing policy includes so you aren’t left with unexpected expenses.

Myth #8: Your credit score doesn’t affect your insurance rate

In several states, insurers use credit-based scoring as part of the rating process. These scores help predict risk levels based on statistical patterns. If your credit has recently improved, speak with your agent—your updated credit profile may help reduce your premium.

Tips to Prevent Coverage Gaps

Staying proactive about your insurance can help you avoid major surprises later on. Here are some ways to strengthen your protection:

• Look over your policy every year, especially following major life or property changes.
• Discuss exclusions with your agent so you understand what isn’t covered.
• Keep an updated inventory of your belongings or photos and details of your vehicle.
• Learn the difference between replacement cost and actual cash value, as they affect claim payouts.

It’s always wise to check in with yourself: Would you be financially prepared if you needed to file a claim tomorrow?

When to Review Your Policy

Your insurance needs shift as your life evolves. It’s important to review your coverage when:

• You purchase or sell a home or vehicle
• You complete major renovations or upgrades
• You experience a significant life event like marriage, divorce, or the birth of a child
• A new driver joins your household
• You launch a business or begin a side gig
• Your financial situation or credit score changes

If you’ve ever believed one of these myths or simply want to ensure your coverage still aligns with your current needs, now is a great time to reassess. Taking a closer look today can help you avoid costly gaps tomorrow.

If you have questions or want guidance on optimizing your coverage, our team is here to assist you with a straightforward, no-pressure review.