Anyone concerned about their finances during the ongoing recession might want to take a quick refresher on insurance, and then reviewing their own policies and coverage anew, according to a poll conducted by the National Association of Insurance Commissioners (NAIC). The NAIC is an organization of states' chief insurance regulatory officials that "serves the needs of consumers and the industry, with an overriding objective of supporting state insurance regulators as they protect consumers and maintain the financial stability of the insurance marketplace."
The organization noted in a news release that the displayed lack of knowledge by a representative segment of quiz takers is of particular concern during these tough economic times, considering increasing unemployment rates and decreasing home values. Americans certainly didn't lack in confidence heading into the survey, as "nearly 60 percent said they feel 'very confident' when making insurance decisions overall". Unfortunately, the same self-assuredness didn't translate into results because "on average, Americans flunked the test with only a 40 percent score."
The AP reported on the results of the quiz, highlighting a few findings, such as:
Although the quiz just touched on auto insurance coverage, an interesting series of question(s) might have been whether individuals are aware of their state's "minimum" required auto insurance, what it would cover, and whether they know about uninsured and underinsured motorist coverage (UI/UIM). In many states, often people purchase only minimal "liability" coverage, only to find out after they are injured in an accident that their insurance only covers their liability to the other party. If an individual is seriously injured in an accident with an underinsured (or, of course, uninsured) motorist, the repercussions on their employment and finances can be significant. UI/UIM coverage can be used to fill the gap in between insufficient or non-existent liability coverage, where necessary.
Finally, the NAIC noted 4 tips for consumers in its release, which can be boiled down to emphasizing the importance of consumers staying informed and/or getting educated about insurance, and reviewing the policies they already have. As noted by the NAIC:
"With rising joblessness and falling home prices, Americans need to make sure they understand what their insurance policies cover. By making careful, informed decisions about their insurance, consumers can save money and ensure long-term protection for themselves and their loved ones."
Below are some links for consumers that would like to take the quiz or find more information on some of the insurance subjects discussed.