A new Trusted Choice survey revealed that many consumers do not fully understand the details of their insurance coverage, despite 86% saying they have a strong grasp of their policies.
The survey, conducted in advance of National Insurance Awareness Day on June 28, exposes significant insurance knowledge gaps that can be addressed by consulting with independent insurance agents to ensure consumers have the right coverage and understand what is and is not included in their policies, Trusted Choice stated.
“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 Charles Symington, president and CEO of the Independent Insurance Agents of America (Big “I”).
Key Findings from the Survey
The survey found that 56% of Americans are unaware that a standard homeowners policy does not cover flood damage. This lack of knowledge can lead to significant financial losses in the event of a flood, as homeowners may assume they are protected when they are not.
In addition, 70% of respondents do not know that materials or fixtures intended for installation during renovations are not covered by a standard homeowners policy. Also, 46% of respondents do not have or are unsure if they have a home inventory of major household items in case they need to file a claim, the survey found.
The survey also revealed misconceptions about vehicle coverage.
Over half, or 55%, of respondents do not realize that a standard auto policy does not cover business use of a vehicle. Additionally, 44% incorrectly believe that personal items stolen from their car are covered by their auto insurance, when in fact, it is typically a standard home or renters insurance policy that covers such theft, the survey noted.
In addition, 57% do not know that parking tickets generally do not impact auto insurance premiums.
The Role of Independent Agents
Independent agents serve as an unbiased resource to help consumers better understand their coverage needs and navigate policies, according to Trusted Choice.
Kevin Brandt, executive director of Trusted Choice, explained, “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. 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.”
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