Survey: Americans’ low insurance IQ hurts finances

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Americans are lacking in basic knowledge about insurance that might help their finances during the recession, according to a new survey.

Americans are lacking in basic knowledge about insurance that might help their finances during the recession, according to a new survey.

In fact, we know a lot less about insurance than we think we know, according to the National Association of Insurance Commissioners, which sponsored the poll. That disconnect can end up costing them money or gaps in their long-term insurance protection, says the NAIC, which represents state insurance regulators.

“Now more than ever, consumers need to be mindful of the impact their insurance decisions can have on their financial future,” said Terri Vaughan, the group’s chief executive. “By arming themselves with the facts — and improving their insurance IQ — consumers can make sure they are adequately protected, without paying more than they should for that coverage.”

Survey respondents on average flunked the NAIC’s 10-question insurance quiz with only a 40 percent score.

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