With Debunking Day coming up on March 11, there’s no better moment to clear up some of the most common misunderstandings about home and auto insurance. Many people make decisions based on information that’s outdated, partially true, or simply wrong—and those misconceptions can end up causing major financial stress when an unexpected event occurs.

Below, we walk through eight persistent insurance myths and explain what you should actually rely on when evaluating your coverage.

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

The reality: The color of your car—red, black, blue, or otherwise—has zero impact on your auto insurance premium. What insurers really pay attention to are factors such as the vehicle’s age, model, safety equipment, engine type, usage patterns, and your driving history. Color never enters the equation, no matter what rumors say.

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

The reality: Flooding can occur almost anywhere, not just in designated high-risk areas. In fact, roughly one-quarter of flood insurance claims come from people living outside those zones. Even more important, standard homeowners policies typically exclude flood-related damage. If rain is a regular part of your weather forecast, it’s wise to evaluate whether flood insurance would give you extra peace of mind.

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

The reality: While older vehicles do lose value over time, that doesn’t automatically mean dropping full coverage is the right move. Most states still require liability coverage regardless of a car’s age. And if you rely on your vehicle every day and a major repair or replacement would be financially difficult, keeping collision and comprehensive coverage may still be the smartest choice.

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

The reality: Homeowners policies include personal property protection, but the amount is typically limited to a percentage of your home’s insured value. Items like antiques, top-tier electronics, jewelry, or rare collectibles can easily exceed those limits. To fully safeguard valuable belongings, you may need to specifically list them on your policy or add separate protection.

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

The reality: Coverage for drivers outside your household isn’t always guaranteed. Many policies extend protection if someone uses your car occasionally and with your permission, but limits apply—especially if the car is being used for deliveries, ridesharing, or business purposes. If another person regularly drives your vehicle, confirm how your insurer defines “covered drivers.”

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

The reality: Even a solid emergency fund may not be enough to recover from a major loss. Homeowners insurance covers far more than the physical structure of your home—it also includes liability coverage, personal property protection, and loss-of-use benefits if you’re unable to live in your home during repairs. Considering that rebuilding a home now averages more than $320,000, skipping coverage introduces tremendous financial risk.

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

The reality: Many personal auto policies do extend to rental vehicles, but that coverage usually applies only to personal use. If you’re renting a car for business travel or commercial activity, your personal policy may not apply at all. It’s always smart to confirm before turning down the rental agency’s insurance options.

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

The reality: In many states, insurers use something called a credit-based insurance score when determining your premium. Why? Because research shows a statistical link between credit behavior and likelihood of filing a claim. If your credit has improved recently, it’s worth reaching out to your agent—your rate may be eligible for adjustment.

Quick Ways to Avoid Coverage Gaps

Taking a proactive approach to your coverage can save you from costly surprises. Consider these simple steps:

• Review your insurance annually, especially after major life events.
• Talk with your agent about what’s excluded—knowing the limits of your policy is crucial.
• Create a home inventory or document your vehicle’s details to simplify future claims.
• Understand whether your policy pays based on replacement cost or actual cash value.

Ask yourself: If something happened tomorrow, would I be financially prepared to file a claim?

When to Update Your Insurance Policy

Life doesn’t stand still, and neither should your insurance. Review your coverage when:

• You buy or sell a home or vehicle
• You complete major renovations or upgrades
• You experience changes like marriage, divorce, or the arrival of a child
• A new driver—especially a teen—joins your household
• You launch a business, side gig, or begin using your home or car differently
• Your financial situation, income, or credit score changes significantly

Whether you’ve believed one of these myths or just want reassurance that your policy is still the right fit, now is a great time to reevaluate your coverage. We’re here to help you make sense of your options and avoid unexpected gaps. Reach out anytime to schedule a friendly, no-pressure review.