40 Insurance Myths Busted

🏡 Home Insurance Myths

Myth: Home insurance covers everything.
Truth: It excludes floods, earthquakes, wear and tear, and more.
Myth: Flood damage is covered by standard policies.
Truth: You need separate flood insurance.
Myth: Home insurance covers maintenance issues.
Truth: Damage from neglect or poor upkeep isn’t covered.
Myth: Insurance covers the market value of your home.
Truth: It usually covers the rebuild cost, not market value.
Myth: My home is safe, so I don’t need insurance.
Truth: Disasters, theft, or liability claims can happen to anyone.

Myth: Red cars cost more to insure.
Truth: Color has no effect on your premium.
Myth: Minimum liability is enough.
Truth: One serious accident can cost far more than the minimum.
Myth: Personal auto insurance covers business use.
Truth: You may need a commercial policy for business driving.
Myth: Comprehensive insurance covers everything.
Truth: It covers non-collision events like theft, not all damage.
Myth: Older cars don’t need insurance.
Truth: Liability coverage is still legally required in most states.

Myth: If I’m healthy, I don’t need health insurance.
Truth: One emergency visit can cost thousands.
Myth: All health plans cover the same services.
Truth: Coverage varies widely by plan and provider.
Myth: Health insurance covers all medical expenses.
Truth: Most plans have deductibles, co-pays, and exclusions.
Myth: You can’t get insurance if you have a pre-existing condition.
Truth: Under the ACA, you can’t be denied for that.
Myth: Dental and vision are included in all plans.
Truth: They often require separate policies.

Myth: Only breadwinners need life insurance.
Truth: Stay-at-home parents contribute value that’s costly to replace.
Myth: Life insurance is too expensive.
Truth: Term life policies can be very affordable.
Myth: You can’t get life insurance if you have health issues.
Truth: Some policies don’t require medical exams.
Myth: My employer’s life insurance is enough.
Truth: It may be limited and non-transferable if you change jobs.
Myth: Only older people need life insurance.
Truth: It’s cheaper and easier to get when you’re young and healthy.

Myth: Insurance companies will always deny claims.
Truth: Most legitimate claims are paid, especially with proper documentation.
Myth: Filing a claim will automatically raise my rates.
Truth: Not always—depends on the situation and insurer.
Myth: All policies are the same.
Truth: Coverage details and exclusions vary between companies.
Myth: Insurance is a waste of money if you never file a claim.
Truth: It protects your finances from unexpected disasters.
Myth: You only need to review your policy once.
Truth: You should reassess annually or after major life events.

Myth: Insurance covers new-for-old automatically.
Truth: Many policies pay actual cash value unless you pay extra.
Myth: You don’t need to document your belongings.
Truth: Without proof, claims can be denied or underpaid.
Myth: Once insured, you’re covered no matter what.
Truth: Misrepresenting info can void your policy.
Myth: You can buy insurance after a loss occurs.
Truth: Insurance only covers future, not past, events.
Myth: Small claims are harmless.
Truth: Multiple small claims can lead to rate increases or non-renewal.

Myth: Paying monthly doesn’t cost more.
Truth: Monthly payments often include service fees.
Myth: The cheapest policy is always best.
Truth: Cheaper plans may offer less coverage or slower claim service.
Myth: You can’t switch insurers mid-policy.
Truth: You can switch at any time, often with a prorated refund.
Myth: All discounts are automatically applied.
Truth: You often need to ask or qualify for them.
Myth: Bundling always saves money.
Truth: It often helps—but not always. Compare bundled vs. separate.

Myth: Renters don’t need insurance.
Truth: Renters insurance covers belongings and liability.
Myth: My friend’s insurance covers them if they drive my car.
Truth: Your insurance is usually primary in an accident.
Myth: Umbrella insurance is only for the wealthy.
Truth: It's affordable and great for extra liability protection.
Myth: Filing a claim erases your “no-claims” history.
Truth: Many insurers still consider your overall record.
Myth: Insurance is only about risk protection.
Truth: It’s also peace of mind, legal compliance, and financial security.