Report: Majority of Americans Don't Know Insurance Basics

04/08/2010

Understanding their insurance policy may enable consumers to file claims correctly and efficiently.

A recent report by the National Association of Insurance Commissioners showed that many Americans have their homework cut out for them: 60% failed a 10-question quiz about insurance coverage. Much of this confusion centered around health insurance, with 86% of respondents saying they did not understand all of the terms used in the health care debate.

Respondents also expressed uncertainty regarding their auto insurance coverage. About half of them were not aware that their credit history could be among the factors used to determine their premiums, or that their policies would not cover property stolen from their vehicle.

Meeting with an insurance agent can help consumers make sure they have necessary coverage.

"Do not wait until you need to file a claim before evaluating the scope of your coverage," the report said. "By understanding your policies, you can be prepared for any situation and, potentially, save money by avoiding unnecessary costs."

Consumers can also protect themselves from insurance fraud by confirming with state regulators that their insurer or agent is licensed to practice.

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