Take this short quiz:
1.Â Â Â Does auto insurance automatically cover a rental car?
2.Â Â Â Can you own a house without homeowners insurance?
3.Â Â Â If you need life insurance, in general how much coverage should you buy?
If you answered: No, yes and 5-7 times your annual salary â€“ Bravo!!! You know more about insurance than the majority of 1,000 American adults who answered those questions incorrectly on a 10-question quiz about insurance. On average, Americans flunked the test â€“ receiving only a 40% score.
That shows that consumers know a lot less about insurance than they think, says the National Association of Insurance Commissioners, a group of state insurance regulators that sponsored the poll.
Among the poll’s findings, which covered several areas of insurance:
- Health insurance: Less than half of those surveyed (49%) know that if they leave their job and choose COBRA (Consolidated Budget Reconciliation Act) insurance to continue their health benefits, they must pay the full cost of coverage.
- Life insurance: Only 14% knew that the amount of life insurance typically recommended for individuals is 5 to 7 times your annual salary.
- Home insurance: About 19% understand that the requirement for PMI (private mortgage insurance) depends on the size of the down payment and law.
You can see how well you do on the rest of the quiz by clicking through to www.insureUonline.org and taking the Insurance Quiz. (Look for a small light-blue box on the right-hand side of the page. Itâ€™s near the top.)
If you didnâ€™t do so hot or have questions, educate yourself. NAICâ€™s Web site at www.insureUonline.org is one place to start.
But see my columns for other tips: