Do Americans actually understand their insurance coverage?
Do Americans actually understand their insurance coverage? | Insurance Business America
Insurance News
Do Americans actually understand their insurance coverage?
Majority say they do – but do they?
Insurance News
By
Kenneth Araullo
Ahead of National Insurance Awareness Day on June 28, a new survey by Trusted Choice, the national consumer brand representing members of the Independent Insurance Agents & Brokers of America (the Big “I”), revealed that many consumers do not fully understand their insurance coverage.
The survey found that while 86% of respondents claimed a strong understanding of their policies, many were incorrect or unsure about coverage specifics when tested on their knowledge.
“Because insurance protects people’s most important assets, it’s crucial that policyholders understand their coverage. But unfortunately, our survey shows there is a considerable insurance knowledge gap among consumers,” said Big “I” president and CEO Charles Symington (pictured above).
“Independent insurance agents can bridge that gap by serving as a resource on coverage expectations versus realities, especially in this difficult insurance market where many people need more guidance,” Symington said.
The survey results indicated that 56% of Americans are unaware that a standard homeowners policy does not cover flood damage. Additionally, 70% are unaware that a standard homeowners policy does not cover materials or fixtures to be installed during renovations.
Nearly half, or 46%, do not have or are unsure if they have a home inventory of major household items in case they need to file a claim. Moreover, 55% are unaware that a standard auto policy does not cover business use of the vehicle, and 44% incorrectly believe that personal items stolen from their car are covered by a standard auto insurance policy, though such theft is typically covered by a standard home or renters insurance policy.
Finally, 57% are unaware that a parking ticket generally won’t affect a driver’s auto insurance premiums.
“Insurance coverage can be confusing. Consumers often think they have a strong grasp on understanding their policies, but oftentimes they don’t. An independent agent is best equipped to walk consumers through the entire process—from shopping for coverage to purchasing a plan and filing a claim,” Trusted Choice executive director Kevin Brandt said.
“With their unbiased guidance and personalized approach, they empower individuals to navigate policies with clarity and confidence, ensuring they truly understand their coverage and make informed decisions,” Brandt said.
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