Study: Almost half of homeowners don’t know what liability insurance covers, a quarter have no idea how much protection they have
July 17 2018 (Foster City, Calif.)- Do you know what liability home insurance covers? According to Insurance.com’s latest homeowners survey—which tested consumer knowledge on home insurance – nearly half (48%) of respondents do not know the answer.
“Insurance.com surveyed 1,000 homeowners to find out how much they know about their home insurance policy, if they shop for the best rates and whether they’re discussing needed coverage changes with their insurer,” said Michelle Megna, managing editor of Insurance.com. “Turns out, many homeowners don’t understand how their home insurance coverage works, and many aren’t shopping a policy to get the best price.”
Among key findings:
- 24 percent have no idea how much liability insurance they have
- 84 percent incorrectly thought you pay a deductible when filing a liability claim
- One-third don’t compare rates to make sure they’re getting the best deal
- 40 percent didn’t know how personal property insurance works
- 59 percent didn’t know what replacement value means in terms of home insurance reimbursement
“The reason why the findings are important is because it shows that homeowners are at risk for being underinsured,” said Megna. “Research shows that as many as three out of five homeowners are underinsured by an average of 20 percent which means if your house costs $200,000 to replace, you’d be short by $40,000 if you had to file a claim.”
The full report of the survey—which includes additional data and analysis on age and gender—is available at https://www.insurance.com/coverage/homeowners-insurance-survey-2018.
“Even if you are aware of how your home insurance works to protect you, you should still shop around and compare rates to find the best deals. You’re likely overpaying if you have a set-it-and-forget-it approach to your coverage,” added Megna.