Insurance is a complex topic, and can sometimes be overwhelming when explained to prospects and customers. Since it is such a broad subject, there are some common misconceptions about certain policies and what they cover. Knowing fact from fiction can have a major impact on your life.

If you purchased a policy with the belief that it will cover certain risks, check again. Some insurance policies have drawbacks or don't cover what the buyer thinks they will.

We are here to uncover and debunk some of these insurance myths. To avoid causing problems for you or your family, you have to learn the truth the hard way. While some of these truths may bring relief, some will also bring clarity. You'll have a better understanding of what certain policies actually do cover. In the end, you'll be a more-educated buyer.

We've grouped the myths into two insurance categories: Home Insurance and Auto Insurance.

Home Insurance

Home insurance covers flooding damages

Actually, flooding damages are covered by a completely separate insurance policy. You can purchase flood insurance through the National Flood Insurance Program. Of course, having this coverage is only necessary if you live in places that are prone to flooding like Texas or Louisiana.

Your personal belongings are covered by your landlord's insurance

Nope! Your landlord's insurance only covers the building in which you live. All your belongings can be covered by purchasing a renters insurance policy.

If your property is stolen or damaged, your insurance policy will replace it

If you have actual cash value coverage (ACV), it will only pay the original price of the property minus the wear and tear. Unless you have replacement cost coverage, don't count on your insurance policy to replace stolen or damaged property.

It's good to insure your home at its assessed value

Your home is actually assessed more by its surroundings, not so much by the home itself. The neighborhood, amount of land it occupies, and quality of local schools all play a major role in figuring a home's assessed value.

Any and all injuries are covered by home insurance

If you trip and fall in your home, your home insurance policy will not cover or reimburse you for damages. However, if a guest is injured on your property, their injuries will be covered by your policy.

If you or a family member hurts themselves under your roof, look into your health insurance policy (if you have one) to see what can be covered.

Auto Insurance

Anyone who drives your car isn't covered by auto insurance

As long as you give them consent, whoever drives your car will be secured by car insurance. Unless a person is specifically excluded from your auto insurance policy, anyone is eligible to drive your car.

If your belongings are stolen from your car, your auto insurance policy will cover it

Standard auto insurance policies don't cover any personal belongings you leave in your vehicle. If you're worried about your belongings being stolen, consider adding a "floater" to your auto policy. You can also add this to your homeowners or renters insurance policies.

If your car is damaged in your garage, it's covered by your home insurance policy

On the contrary, homeowner policies exclude damage to vehicles. To insure your vehicle is covered no matter its location, you will need a comprehensive auto insurance policy.

Collision insurance covers you if you hit an animal

Not all types of collisions are covered by collision insurance. For collisions with animals, you would also need a comprehensive auto policy. In any case, try to avoid hitting animals and people so you never even have to bother with it!

The older you are, the higher your auto insurance rates become

It's quite the opposite. Many think that older people pay more for insurance because they have more health problems. They believe because they have slower reflexes, they are more likely to get into a crash.

Actually, drivers over 55 can qualify for reduced auto insurance rates. In addition, most insurance companies offer a discount on auto insurance to older drivers who complete a safe driving course.

Now that you know the real deal about insurance, you'll have a better sense of what you're looking for in an insurance policy. Ask the provider questions and express concerns about the coverage you're buying. Spread the word to others who have insurance but don't know the extent of their coverage. Most importantly, always research ahead of time so you buy your insurance as a prepared and informed customer.