The coverage terms of property insurance policies are very important and impactful things. However, many consumers make incorrect assumptions about what terms such policies typically contain. As a recent InsuranceQuotes survey underscores, some such misconceptions are very common.
Examples of property insurance topics that the survey results point to commonly seeing mistaken consumer views include:
- Flood damage: Over half of the survey respondents had the misconception that flood damage is covered in standard homeowners policies.
- Renter’s insurance: A vast majority of the survey respondents were not aware that standard renters’ insurance policies typically contain coverage for thefts from one’s car.
As a note, in both of these areas, the misconception in question was especially prevalent among millennials.
Now, consumers not having a clear understanding of what typically is and isn’t covered by insurance policies isn’t just problematic for consumers. It can also cause problems for insurers. It could cause policyholders to have inaccurate expectations when filing a claim. When policyholder expectations are off, the potential for disputes to come up in connection to a claim can go up. An insurance claim dispute can have many impacts for an insurer. It could impact the future of their business relationship with the policyholder in question. It could affect their reputation among policyholders and the general public. Also, in some cases, such a dispute could escalate into a full-blown legal battle. So, avoiding unnecessary disputes and understanding what options for response are available when a dispute does arise can be important for an insurer.
Why do you think property insurance misconceptions are so common among millennials and other consumers? What sorts of things do you think would most help with reducing the prevalence of these incorrect assumptions?
Source: Huffington Post, “Flooding, Dog Bites, Stolen Car Items — How Insurance Misconceptions Can Cost You,” Laura Adams, April 7, 2017