Debunking the Most Common Insurance Myths

Insurance is one of those things everyone has but few truly understand. That knowledge gap leads to myths that cost people real money. Here are seven we hear constantly — and the truth behind each one.

Myth #1: Red Cars Cost More to Insure

The Truth: Your car's color has absolutely zero impact on your insurance premium. Carriers look at make, model, year, engine size, safety ratings, and theft statistics — never color. A red Toyota Camry costs exactly the same to insure as a blue one.

Myth #2: Your Credit Score Doesn't Affect Insurance

The Truth: In 47 states (including Georgia and South Carolina), insurers use credit-based insurance scores as a rating factor. Studies show a strong correlation between credit behavior and claims frequency. People with poor credit can pay 40–100% more for the same coverage. Improving your credit is one of the most effective ways to lower premiums.

Myth #3: Minimum Coverage Is Good Enough

The Truth: South Carolina's minimum auto coverage (25/50/25) might keep you legal, but it won't keep you protected. If you cause a serious accident, medical bills can easily exceed $100,000. Without adequate coverage, you're personally liable for the difference — and that could mean losing your savings, your home, or your future wages.

Myth #4: Home Insurance Covers Everything

The Truth: Standard homeowner's policies have significant exclusions:

• Floods (requires separate policy)
• Earthquakes (requires endorsement)
• Sewer backup (requires endorsement)
• Normal wear and tear
• Certain dog breeds in some policies
• Home business equipment above ~$2,500

Myth #5: Filing a Claim Always Raises Your Rates

The Truth: Not necessarily. Many carriers offer first-claim forgiveness. Weather-related claims (where the entire area was affected) often don't impact your rate. And some claims — like theft — are typically less penalized than at-fault auto accidents. That said, frequent claims will eventually raise your rates, so reserve claims for significant losses.

Myth #6: Older Homes Are Cheaper to Insure

The Truth: Older homes are often more expensive to insure because they may have outdated electrical, plumbing, or roofing systems that increase risk. Additionally, unique architectural features can make repairs more costly. A 1920s craftsman bungalow in the Hill neighborhood might cost significantly more to insure than a 2020 ranch in Grovetown.

Myth #7: You Only Need the Coverage Your Lender Requires

The Truth: Your lender requires enough coverage to protect their investment — not yours. They don't care about your personal property, your liability exposure, or your living expenses if your home becomes uninhabitable. Your coverage should protect your financial life, not just your mortgage.

Get the Facts About Your Coverage

Are you making any of these myths into expensive realities? Schedule a free coverage review with our team. We'll give you the straight facts about your protection — no myths, no sales pressure.