'
ProgramBusiness
 
  


  1. News Articles
  2. Related News Articles
  3. Comments
News Article Details

NAIC Survey Shows Americans Not that Knowledgeable About Insurance

Source: NAIC


Posted on 10 Mar 2009

Facebook LinkedIn Twitter Google

According to a new survey commissioned by the National Association of Insurance Commissioners (NAIC), a vast majority of Americans believe they are smart about insurance, but a deeper look at the issue tells a different story. Among the NAIC’s key findings:

Health: Less than half of those surveyed (49 percent) know that if they leave their job and choose the federal Consolidated Budget Reconciliation Act (COBRA) to continue their health benefits, they must pay the full cost of coverage. However, 58 percent are aware that health insurance will not cover their living expenses if they became disabled and cannot perform their job.

Home: Just one in five respondents (19 percent) realizes that the requirement for private mortgage insurance (PMI) on a newly purchased home depends on the size of the down payment and lender; almost 30 percent think PMI is required by law. Less than 50 percent of people surveyed realize they can legally own a home without homeowners insurance (although lenders will not allow it).

Life: Only 14 percent of respondents correctly know that the amount of life insurance typically recommended for individuals is 5-7 times your annual salary; 29 percent believe 2-4 times an annual salary is the recommended amount; and nearly 40 percent simply say they have no idea. (This is a common benchmark; however, the NAIC encourages individuals to carefully consider their own needs.)

Auto: Less than two-thirds of Americans (62 percent) are aware of the top three factors that impact the cost of auto insurance coverage (i.e., accident history, vehicle safety features, geography). And, only four in 10 respondents (41 percent) know that auto insurance does not automatically cover a rental car.

About the Survey

The NAIC conducted the Insurance IQ study Dec. 4-14, 2008 to highlight consumer concerns and questions; uncover misinformation and insurance myths; and underscore the financial and emotional impact of poor decisions. The insurance intelligence quotient was based on a 10-question quiz on different types of insurance. Participants were given a grade based on the number of questions answered correctly. The participant sample included a nationally representative sample of 1,000 American adults ages 18 and older with a margin of error +/- 3.1 percent in 95 out of 100 cases.


Comments

Post a Comment
If you are a Storefront / Tradingfloor user, click here to login.
Note: As a guest user, please fill out the form below to post a comment.
Post your comments here.
Name :
Email Address :
Captcha :
Comments :
Character left : 2000