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Dilemma: Understanding Insurance — Homeowners

Posted By Administration, Tuesday, August 21, 2018

Insurance.com surveyed 1,000 homeowners on homeowners insurance. Over half of them don’t understand their policies — at all. How bad is it? Bad. This sums up the study:

  84% of homeowners think you pay a deductible when you file liability claim

  48% don’t understand what liability home insurance covers

  24% don’t know how much liability insurance they have

  33% don’t compare rates to make sure they’re getting the best deal

  25% say they’ve never read their policy

That — of course — could leave them vulnerable and underinsured.

Worse again. Too many don’t comprehend or are confused about parts of the home insurance policy:

  Just half — 52% — know what liability insurance covers

  20% think liability covers damage to the home

  Just under 20% say it covers injuries for themselves and their families

Not a surprise:

  Women are more likely to understand liability insurance than men

  The figure is 55% to 49%

  Just 44% of those 25 and 34 will know anything about homeowners

  Over half of those in the other age groups had the right answer

  85% of those over 65 understand liability insurance

That said, we go back to the opening statement: 

  84% incorrectly think a deductible must be paid on a liability claim

  Just 16% — correctly — know you don’t

Then there’s the medical part of liability insurance:

  75% don’t understand how medical payment coverage differs from liability

  25% correctly know the payments cover up to a set amount for those injured in a home regardless of who is at fault

  20% say they don’t know the answer at all

  20% believe it is only for medical bills for them and their family

And — again — women were more likely than men to understand medical payments:

  28% of women answered correctly

  22% of men answered correctly

Replacement cost — another mystery to homeowners:

  52% understand replacement cost repairs damage to the home or replaces it at current prices

  33% think it applies only to personal items that are damaged or stolen and they are paid for after depreciation

  41% correctly know it's the total replacement cost of the home

  24% say it is the amount it will cost to rebuild a home with the same materials used in its construction

  23% think it is the market value of the home

  12% say they have no clue

As for personal property coverage:

  60% know a homeowners policy replace personal possessions up to a certain limit

  29% think it replaces all items in a home

  7% think it replaces trees and landscaping

  4% think it just covers valuable items like jewelry, antiques or art

Flood insurance is another critical area of misunderstanding:

  66% know home insurance doesn’t cover flood damage from groundwater

  70% of women know that

  80% of people 45 to 54 know that

  80% of people 55 to 64 know that

  Less than half of those 25 to 34 know flood insurance isn’t part of homeowners

Credit scoring is one area people are informed on and 88% know credit history can influence the rate paid for homeowners insurance.

Letting insurers know:

  87% will notify the insurance company about an addition that adds value to the home

  67% will notify the insurance company about a renovation project that doesn’t increase the footprint but that increase the home’s value

 

When it comes to telling the insurance company about increased risk:

  31% who add things like a pool or a trampoline don’t mention it

  52% who add a dog to the family don’t mention it

Last — comparing rates:

  33% of homeowners don’t compare rates to get the best deal

  39% of women don’t and 24% of men don’t

  27% — 32% of men — compare rates when the policy is up

  39% say they compare rates every two or three years

Source link: insurance.com

Tags:  flood insurance  Insurance Content  Insurance Industry  Insurance News  Weekly Industry News 

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