That's correct. The rim flange cuts through, or part way through, the sidewall of the tire. It's often not visible on the outside, and is exacerbated by low tire pressure. Interestingly, it's often caused by glancing blows--more to one side of the tire than the other, but not enough to the side to cause a curb rash.
The best preventative measures, other than not hitting the pothole or curb in the first place, are:
1. Avoid low profile tires. If you need more performance, get performance tires in a higher profile.
2. Use the vehicle placard pressure as a minimum that you never ever want to go below. Be sure to adjust for low ambient temperatures. Note that it's heat, not pressure, that kills tires.
Tire and wheel manufacturers have sold the public on low profile tires. This increases their profit dramatically at the expense of the consumer. They would be fine if roads were glass smooth, but roads actually have only minimal maintenance...
