Many people make decisions about their home and auto insurance based on inaccurate or outdated information, which can leave them financially vulnerable. Debunking Day on March 11th offers a great opportunity to clear up some of the most common misconceptions that cause homeowners and drivers to misunderstand their coverage. Understanding what’s true—and what isn’t—can help you make informed choices and avoid unpleasant surprises if you ever need to file a claim.

Below, you’ll find eight widespread insurance myths explained in simple, practical terms so you know what really matters when protecting your home, vehicle, and belongings.

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

The idea that brightly colored cars come with higher insurance premiums has been around for years, but it’s simply not accurate. Insurance companies don’t consider your car’s color when determining your rate. Instead, they look at factors such as the vehicle’s age, make, model, safety features, engine type, how far you drive, and your driving record. Paint color never impacts your premium.

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

While high‑risk areas do experience more frequent flooding, they are far from the only places affected. Roughly a quarter of all flood-related insurance claims come from properties outside designated flood zones. Another important point: standard homeowners insurance policies typically exclude flood damage entirely. If your area receives rainfall—and most do—flood insurance may be worth exploring.

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

It’s true that older vehicles lose value over time, but that doesn’t automatically mean you can drop coverage. Liability insurance is required in most states regardless of the car’s age. Additionally, if you depend on your vehicle for everyday transportation and couldn’t afford to replace or repair it after an accident, collision and comprehensive coverage may still provide essential protection.

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

While homeowners policies do include personal property coverage, those limits are often tied to a percentage of your home’s insured value. That means certain items—like fine jewelry, artwork, collectibles, or expensive electronics—may exceed standard coverage limits. To fully insure high‑value belongings, you may need to list them individually and purchase additional coverage or endorsements.

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

Coverage isn’t guaranteed for every person who gets behind the wheel of your car. Many policies extend protection to occasional drivers who have your permission, but there are exceptions and limitations. Business use, delivery driving, and ridesharing often fall outside standard coverage. If someone regularly uses your vehicle, or uses it for work, you’ll want to confirm they’re properly listed on your policy.

Myth #6: “A strong savings account eliminates the need for homeowners insurance.”

Even with substantial savings, the financial hit from a major loss can be overwhelming. Homeowners insurance includes far more than coverage for your house—it typically provides liability protection, coverage for your personal belongings, and additional living expenses if your home becomes uninhabitable. Considering the average cost to rebuild a home now exceeds $320,000, foregoing insurance places you at significant risk.

Myth #7: “My car insurance always applies to rental vehicles.”

Many personal auto policies do extend coverage to rental cars, but usually only when the rental is used for personal travel. Rentals for business purposes or commercial use are a different story, and your personal policy may not apply in those situations. It’s always wise to review your policy details before declining insurance offered by a rental agency.

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

In several states, insurers use credit‑based insurance scores as part of their rating process. These scores help predict risk patterns, which is why they can influence premium calculations. If your credit has recently improved, it may be beneficial to talk to your agent about whether your rate can be adjusted.

Quick Tips to Stay Properly Insured

Taking a proactive approach to your insurance can help prevent unexpected coverage gaps. A few practical steps include:

• Reviewing your policies each year, especially after major life changes.
• Asking your agent to explain exclusions so you understand exactly what isn’t covered.
• Creating an inventory of your belongings, including photos and estimated values, to simplify future claims.
• Learning the difference between replacement cost and actual cash value, since each impacts your payout after a loss.

It’s also helpful to consider whether you’d be financially comfortable if you needed to file a claim tomorrow. If the answer is no, it might be time for a policy review.

When You Should Revisit Your Insurance Coverage

Life changes quickly, and your insurance should evolve alongside it. You may need to revisit your policy if:

• You buy or sell a home or vehicle.
• You complete a significant renovation or upgrade.
• You get married, divorced, or welcome a new child.
• A new driver joins your household, particularly a teenager.
• You begin a new business or take on a side hustle.
• Your financial situation—including your credit score—changes.

Whether you’ve believed one of these common myths or simply want reassurance that your coverage still works for your needs, now is a great time to reassess your policies. Taking a closer look today can help protect you from unexpected financial stress down the road.

If you’re unsure where to start, reaching out for a no‑pressure review can help you understand your options and feel confident in your protection.