Policygenius issued the following announcement on July 23.
Many Americans are confused about the basics of homeowners insurance, according to a new survey from Policygenius, the nation's leading online insurance marketplace.
Even respondents who noted they have home insurance were not sure about some of the basics. Nearly half of homeowner respondents (49.4%) incorrectly reported how to calculate the coverage amount for their home, meaning they may be significantly underinsured in the event of a catastrophe or even overpaying for more coverage than they need.
The survey also found widespread confusion around what is covered by a typical home insurance policy. More than half of homeowners surveyed did not know that a typical policy does not cover floods, and more than 80% did not know that a typical policy does not cover earthquakes. This means many American homeowners may be dangerously unprotected from natural disasters, even as the National Oceanic and Atmospheric Administration expects a busy 2020 hurricane season.
"Home insurance is a protection created to give you peace of mind, but our survey suggests that the process of getting coverage is difficult for many Americans to navigate," Fabio Faschi, home insurance expert and property and casualty operations manager at Policygenius, said. "When more than a quarter of Americans think home insurance is much more expensive than it actually is, that misperception can make it hard for people to accurately budget for their needs."
This lack of understanding can also lead to Americans missing out on big opportunities to save. A significant majority of homeowners (83.2%) underestimated how much they could be cutting costs by combining their home and auto insurance policies with the same company, known as bundling. Policygenius customers have saved an average of 30%[1] by bundling home and auto insurance with us — so homeowners may be leaving significant savings on the table.
Policygenius' Home Insurance Literacy Survey also found:
- More than a quarter of Americans (29.8%) thought home insurance costs hundreds, or even thousands, of dollars more than it actually does.
- Nearly half of homeowners (48.7%) didn't know that setting a higher policy deductible can lower premiums.
- 41.5% of homeowners didn't realize that buying home and auto insurance from the same company can lower their home insurance rates.
- More than a quarter of homeowners (26%) felt they do not have enough coverage to replace their home, which would leave them unprotected in the event of a disaster.
| 1Savings figure represents the average price savings by customers who shared a copy of their prior bundled home and auto coverage with Policygenius and used Policygenius to switch to a comparable policy with a different insurer between 2/1/20 and 2/29/20. Calculation is based on a composite of multiple different coverage amounts, contracts and insurers. Not all policies in this calculation are available in all states. Your savings may vary. |
Policygenius' survey is based on responses from a nationally representative sample of 2,500 Americans ages 25 and over. It was conducted through Google Surveys from June 25 through July 3, 2020. You can read the full report here.
About Policygenius: Policygenius is the nation's leading online insurance marketplace, with headquarters in New York City and Durham, North Carolina. We've helped more than 30 million people shop for all types of insurance like they shop for everything else — online — and have placed over $60 billion in coverage. Policygenius launched in 2014 and is one of the early insurtech pioneers. Policygenius was named to Forbes list of Best Startup Employers (2020), Crain's Fast 50 (2019) and Inc. Magazine's Best Workplaces (2018, 2019, 2020).
Original source can be found here.
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