Insurance Maze Blog

A 2007 insurance survey conducted for MetLife Auto & Home Insurance Company by Zogby International revealed that many Americans misunderstand the levels of protection offered by their auto and home insurance policies.

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The Survey Revealed:

• “Most Americans seriously underestimate how much they might owe if their vehicles were “totaled.” Only 40% of those polled knew that it was possible to owe more on a vehicle than it’s actually worth at the time of accident.”
  Most insurance companies will settle on an “Actual Cash Value” or depreciated value basis, which could mean than you will still owe a balance to your lender.
• “Although more than half (55%) of Americans don’t purchase insurance for rental vehicles from a rental agency, correctly assuming that most auto insurers would provide coverage, a large majority misunderstood—or didn’t know—what expenses their auto provider would actually cover.”
  Items such as loss of rental income, towing and storage of a damaged rental vehicle may not be covered by your auto insurance.
• “Almost half of Americans (46%) say that their auto insurance company would pay for the full cost of items such as batteries, tires and shocks, if damaged in an accident.”
  Your auto insurance policy will more than likely pay for these items on an “Actual Cash Value” or depreciated value basis.
• “More than seven out of ten (71%) Americans with home insurance said that their insurance carrier would pay for the full cost to rebuild from a natural disaster or fire, while 72% percent said they would be reimbursed for the full cost to replace personal belongings.”
  Most home insurance companies have a “maximum” amount they will pay for a total home loss and normally personal property is replaced on a depreciated value basis, unless a “Replacement Cost” endorsement is purchased.
• “Almost seven out of ten (69%) Americans expected that their home insurance would pay, in the event of a loss, for upgrades to the property necessitated by building code ordinances, such as upgraded wiring.”
  Most standard home insurance policies do not provide this coverage, however, this coverage is normally offered by an endorsement to the home policy.
• “More than six out of ten (64%) Americans thought that their home insurance would provide coverage for water damage resulting from the back-up of water from sewer, sump pump, or drains.”
  Most standard home insurance policies specifically “Exclude” this type coverage, however, it is normally offered by a separate endorsement to the home policy.

Insurance Maze Articles of Interest

• Life Insurance & Beneficiaries
• Is Your Commercial Vehicle Insured On Your Personal Auto Policy?
• Medicare Supplement Insurance & Medicare
• Home Insurance/Home Inventory-A Good Combination

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