March 11, 2013 (Foster City, CA) – Drivers failed Insurance.com's new test of car insurance basics, with an average score of only 32 percent. In an analysis of results by gender, age and region, no group scored higher than 39 percent accuracy.
Insurance.com's "Insured and Confused" survey asked 500 drivers 10 multiple-choice questions about auto insurance coverage terms and discounts. The findings show that many drivers have no understanding of what they're buying when purchasing auto insurance.
The quiz asked respondents to identify the correct definitions of basic auto insurance terms. On seven out of 10 questions, less than half of respondents were able to make the correct picks. Accuracy was even in the single digits for a few questions:
1. What does comprehensive coverage pay for? -- 2 percent
2. What are typical discounts auto insurance companies will offer if you qualify? -- 7 percent
3. What factors can car insurance companies typically use when setting rates for full coverage? -- 8 percent
4. What does uninsured motorist (UM) coverage pay for? -- 14 percent
5. What does collision coverage pay for? -- 23 percent
6. What does auto liability coverage pays for? -- 26 percent
7. If a friend told you she has liability limits of 25/50/40, what does that mean? -- 41 percent
8. If your car is totaled, what does gap insurance pay for? -- 55 percent
9. What does Personal Injury Protection or Medical Payments coverage pay for? -- 69 percent
10. If a friend borrows your car and crashes it, whose insurance pays? -- 71 percent
"An accuracy rate of 2 percent for defining 'comprehensive coverage' is especially troubling," said Michelle Megna, managing editor of Insurance.com. "Unfortunately its name is quite misleading – it's not 'comprehensive' at all -- which clearly leads to confusion among auto insurance buyers."
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Here are notable average scores by demographic:
South: 34 percent.
West: 32 percent.
Midwest: 31 percent.
Northeast: 29 percent.
Results indicate that taking the time to read an auto insurance policy does not lead to better grasp of the basics. Drivers who have never read their policies scored the highest in basic knowledge.
"Drivers may see their policies as gobbledygook," said Megna. "Their eyes are moving over the words but there's no understanding."
Despite lack of knowledge, there’s no shortage of bravado. Drivers who think they have "excellent" car insurance knowledge scored the lowest.
See the full article at: http://www.insurance.com/auto-insurance/coverage/car-insurance-test-results.html.
Take the quiz here: http://www.insurance.com/auto-insurance/car-insurance-test.html.
Insurance.com commissioned a survey of 500 drivers age 18 and older and asked 10 multiple-choice questions on the basics of car insurance. The survey was fielded in January 2013.
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Managing Editor, Insurance.com
mmegna (at) insurance.com
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