A majority of Americans lack an adequate understanding of their insurance policies, according to a new survey by the National Association of Insurance Commissioners (NAIC).
In fact, of the 1,000 adults surveyed, only 45% said they were confident making insurance decisions and more than 60% failed to correctly answer basic questions about their insurance coverage.
The lack of understanding was deeper concerning health insurance, with 86% of respondents indicating that they do not understand all of the terms being used in the current discussion on health care reform and 55% acknowledging that they do not understand what a pre-existing condition is.
“Consumers today are being forced to make difficult decisions about their insurance coverage—decisions that could have a very profound impact on their financial future,” NAIC CEO Therese Vaughan said in a statement. “At the same time, they are being overwhelmed with new and sometimes conflicting information about changes to our nation’s health care policies. By doing their homework and brushing up on the facts, they can improve their Insurance IQ, which will ultimately enable them to make the best decisions for themselves and their families.”
The NAIC survey also found some widespread misconceptions regarding the basics of auto insurance. For example, 63% of respondents did not understand that if property gets stolen from their car, it is covered by their homeowners/renters policy—and not auto insurance.
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