NAIC Insurance IQ Reveals American Not Savvy
KANSAS CITY, Mo. — In these uncertain financial times, knowledge is your best policy — especially when it comes to insurance. According to a new survey commissioned by the National Association of Insurance Commissioners (NAIC), a vast majority of Americans believe they are smart about insurance, but a deeper look at the issue tells a different story. If you, too, believe you have a high “Insurance IQ,” see if you can answer these three basic questions:
1. Does auto insurance automatically cover a rental car?
2. Can you own a house without homeowners insurance?
3. In general, how much life insurance is recommended in relation to your annual salary?
If you answered, no, yes and 5-7 times your annual salary, you bested the majority of 1,000 American adults who got them wrong in a 10-question quiz designed to test the nation’s Insurance IQ. Indeed, on average, Americans flunked the test with only a 40 percent score — a solid “F” by most U.S. educational grading standards.