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March 11th is Debunking Day, making it the perfect opportunity to clear up some long-standing confusion surrounding home and auto insurance. Many people rely on assumptions or outdated information, which can lead to gaps in coverage or unpleasant surprises when it’s time to file a claim. Understanding what’s true—and what isn’t—can make a big difference in protecting your finances.

Below, we walk through eight widespread insurance myths and reveal what you should keep in mind instead.

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

Despite the rumor, the color of your car has no influence on your insurance premium. Insurers look at details such as the vehicle’s age, make and model, safety ratings, repair costs, how frequently you drive, and your driving history. Paint color simply isn’t part of the equation.

Myth #2: “Flood insurance is only necessary if you live in a flood zone.”

Flooding is far more common than many realize, and about a quarter of all flood-related claims come from outside designated high-risk areas. Even more surprising—standard homeowners insurance typically excludes flood damage. If your area gets regular rainfall, it’s worth considering a separate flood policy.

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

Although an older vehicle may have a lower market value, that doesn’t mean you should automatically forgo certain coverages. In most states, liability coverage is still required. And if repairing or replacing your car after an accident would be a financial burden, collision and comprehensive coverage may still be important, regardless of the car’s age.

Myth #4: “My homeowners policy protects every belonging I own.”

Homeowners insurance does cover personal possessions, but coverage is usually capped based on a percentage of your home’s insured value. This means high-value items—such as jewelry, collectibles, or specialized electronics—can exceed standard limits. If you own valuable pieces, you may need separate endorsements or scheduled coverage to fully protect them.

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

Coverage for other drivers isn’t always guaranteed. Most policies extend protection to occasional drivers who have your permission, but certain situations—like using the car for delivery services or ridesharing—may not be covered. If someone regularly drives your vehicle or uses it for work, it’s important to confirm they’re listed on your policy.

Myth #6: “A strong savings account means I don’t need homeowners insurance.”

Even a solid financial cushion may not cover the full impact of a major loss. Homeowners insurance does far more than repair or rebuild your house—it also provides liability protection, covers personal belongings, and helps pay for living expenses if your home becomes temporarily uninhabitable. Considering the average cost to rebuild a home now exceeds $320,000, going without coverage poses substantial risk.

Myth #7: “Rental cars are automatically covered by my auto insurance.”

Many personal auto policies do extend to rental vehicles, but only when they’re being used for personal activities. If you’re renting a car for business-related travel, your policy may not apply. Always verify your coverage before declining the rental company’s insurance options.

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

In many states, insurers use a credit-based insurance score when determining premiums. This isn’t about your ability to repay debt—it’s about statistical links between credit patterns and risk. If your credit has improved, it’s worth checking in with your agent to see if your rate could be adjusted.

Quick Tips to Prevent Coverage Gaps

Staying informed and proactive about your insurance can help you avoid stressful surprises. Consider taking these steps:

• Review your policy once a year, and especially after major life events.
• Ask your agent to explain exclusions—knowing what isn’t covered matters just as much as knowing what is.
• Keep an updated inventory of your belongings, including photos and approximate values.
• Understand the difference between replacement cost and actual cash value so you know what to expect if you file a claim.

It’s always worth asking yourself: “If I had to file a claim tomorrow, would I be financially prepared?”

When to Revisit Your Insurance Coverage

Your insurance needs shift as your life evolves. It’s wise to reassess your policies when:

• You buy or sell a vehicle or home
• You complete significant renovations or upgrades
• You get married, divorced, or welcome a child
• A teen or new driver joins your household
• You launch a business or side venture
• Your income, credit score, or overall financial landscape changes

Whether you’ve believed one of these common myths or simply want to make sure your coverage still fits your needs, now is a great time to double-check your policies. We’re here to help you stay protected, understand your options, and avoid unexpected gaps in coverage. Reach out any time for a quick, no-pressure review of your insurance.