Many people base their insurance decisions on assumptions that simply aren’t true, and those misunderstandings can leave major gaps in protection. Debunking Day on March 11 is a great reminder to take a fresh look at what your policies really cover. This guide breaks down eight long-standing myths about home and auto insurance so you can make confident, informed decisions.

Myth #1: The Color of Your Car Impacts Insurance Prices

Some believe a red car is more expensive to insure, but paint color has no effect on premiums. Insurers focus on details like the age and model of the vehicle, safety features, engine size, and your driving history. Whether your car is red, blue, or black, the color is never part of the calculation.

Myth #2: Flood Insurance Is Only for Homes in Flood Zones

It’s a misconception that flooding only affects high‑risk areas. Roughly a quarter of all flood-related claims come from outside designated flood zones. Since standard homeowners insurance does not cover flood damage, anyone who lives in an area that gets rain should at least consider adding a separate policy.

Myth #3: Older Cars Don’t Need Full Coverage

While older vehicles may be worth less, they often still need more than basic liability coverage. Most states require liability protection regardless of the car’s age. And if an unexpected accident would leave you unable to replace or repair your vehicle out of pocket, keeping collision or comprehensive coverage may still be important.

Myth #4: Homeowners Insurance Covers Every Belonging

Personal property protection is included in most homeowners policies, but there are limits based on a percentage of your home’s total insured value. High-value items such as jewelry, collectibles, or expensive electronics can exceed those limits. These items may need separate scheduling or special endorsements to be fully protected.

Myth #5: Anyone Driving Your Car Is Automatically Covered

Coverage isn’t guaranteed for every person who gets behind the wheel. Many policies extend protection to occasional drivers who have your permission, but exceptions exist—especially for work-related use like deliveries or ridesharing. If someone frequently drives your car or uses it for business, it’s essential to verify how your policy applies.

Myth #6: Good Savings Can Replace Homeowners Insurance

A strong savings account is helpful, but it’s unlikely to cover the total loss of a home or other major expenses. Homeowners insurance covers not only the structure itself but also liability claims, loss of use expenses, and your belongings. With rebuilding costs averaging well above $320,000, skipping insurance is a significant financial gamble.

Myth #7: Car Insurance Always Carries Over to Rental Cars

Many auto policies include rental car coverage, but usually only for personal use. If a rental is used for business purposes or commercial travel, the coverage may not apply. It’s always smart to review your policy details before declining the rental company’s insurance options.

Myth #8: Credit Scores Don’t Influence Insurance Rates

In many states, insurers use credit-based scores as part of their pricing process because these scores can correlate with claim risk. If your credit has improved over time, it may be worth discussing your policy with your agent—better credit could mean lower premiums.

Quick Ways to Prevent Coverage Gaps

Staying ahead of potential risks starts with understanding your policies and keeping them updated. Here are a few practical steps to help protect yourself:

• Review your insurance policy at least once a year, especially after major life events.
• Ask your agent about exclusions so you understand what isn’t covered.
• Keep an updated home inventory or photos of your vehicle to simplify future claims.
• Know the difference between replacement cost and actual cash value, as this affects claim payouts.

It’s worth asking yourself: Would you be financially prepared if you needed to file a claim tomorrow?

When to Revisit Your Insurance Coverage

Your insurance needs can change quickly as your life evolves. Consider a policy review when any of the following apply:

• You buy or sell a home or vehicle.
• You complete a large renovation or home improvement project.
• Your household changes through marriage, divorce, or the birth of a child.
• A teen or new driver joins your family.
• You start a business, side gig, or other income-generating activity.
• Your finances shift, including income changes or improvements to your credit score.

If you’ve questioned any of these myths or simply want clarity about your coverage, now is an ideal time to take a closer look at your policies. Reviewing them regularly ensures you stay fully protected without surprises. Reach out to your insurance professional for a simple, no-pressure policy checkup.