Too many consumers confused
One of the biggest misconceptions homeowners have is that their homeowners insurance covers them for flooding. We hear their tragic stories regularly after major flood events. There’s a new survey out that quantifies widespread confusion on the part of consumers on a variety of different insurance knowledge. And it should be a clarion call that we must do better to educate our customers.
The Home Insurance Literacy Survey by Policygenius shows 53% of the 2,500 adult U.S. consumers surveyed didn’t know that a homeowners policy doesn’t cover floods and more than 80% didn’t know it doesn’t cover earthquakes. And just as importantly, almost half of homeowners don’t understand how to calculate insurance coverage, leaving them at risk for either being underinsured or overpaying for coverage they don’t need.
Other significant findings: 41.5% weren’t aware that bundling home and auto insurance or other coverages with one carrier can save them money; 48.7% didn’t know that a higher deductible can lower their annual premium; and 49.4% think coverage should be based on the home’s market value. Worse for the insurance industry is this revelation: more than a quarter of Americans think homeowners insurance is more expensive than it actually is.
We have had numerous conversations with those in our agent world about this study and many do all they can to carefully explain to clients the coverage, limits and all that is involved in buying insurance. The feedback we received spanned everything from consumers are looking at their phone when the conversation happens or the consumer, if on the phone, says they are too busy to listen! There are some terrific agents in this business who know they have a duty to talk about the products they sell. But they can only do so much. Any suggestions our readers have on ways to get consumers more engaged in the insurance transaction the better! Please let us know.
LMA Newsletter of 8-3-20