Test Your Insurance Knowledge And Make Sure You Have the Protection You Need

NEW YORK, NY (04/13/2010)(readMedia)-- Knowledge is always a consumer's best policy, especially when it comes to insurance. While many people may believe they are knowledgeable about insurance, a recent survey tells a different story.

Conducted by the National Association of Insurance Commissioners (NAIC), an organization of state insurance regulators, in conjunction with the New York State Insurance Department, the survey was designed to identify consumer concerns and uncover misinformation. Consisting of a quiz given to1,000 adults, the survey found that only 45 percent of participants felt confident making insurance decisions and only around 40 percent correctly answered basic questions about insurance.

So, how would you do? Here is a sampling of the survey questions, followed by the correct answers:

Insurance Quiz:

1. Can your credit score affect the cost of your auto insurance policy?

a. Yes; b. No.

2. At what age do most people become eligible for Medicare?

a. 50 years old; b. 62 years old; c. 65 years old; d. one year after retirement regardless of age.

3. If personal items are stolen from your car, what kind of insurance covers the loss?

a. Auto insurance; b. Homeowner/renter's insurance; c. It depends on the circumstance.

4. Which, if any of the following, best describes an umbrella policy?

a. Additional coverage over and above your primary insurance policies; b. One general policy for all types of insurance; c. Coverage for "Acts of God" (e.g. hurricanes, tornados, earthquakes) d. Flood insurance coverage.

5. Do you need to be related to someone to be a beneficiary on their policy?

a. Yes; b. No.

6. If you leave your job, voluntarily or through termination, and want to continue your health insurance under COBRA, you will pay:

a. Nothing – your employer must continue to pay your premiums; b. The same premium you paid while working; c. The full cost of coverage.

7. What type of financial coverage does short-term disability insurance provide?

a. A percentage of your income based on policy limits; b. 100% of your income while you are disabled; c. All expenses related to your disability.

8. Can you only make changes to your group health insurance coverage during the open enrollment period provided by your employer?

a. Yes; b. No.


1. Yes. Factors that affect your auto insurance premium include such things as driving record, type of vehicle and deductibles chosen. Many insurers also consider your credit history in the underwriting process. However, under New York Law, insurers cannot reject your application based solely on credit information.

2. c -- Medicare pays most medical expenses for people 65 or older, or people under 65 receiving Social Security disability benefits.

3. c -- Coverage for personal items stolen from a car may be covered by either your auto or homeowner/renter's policy depending on the circumstances. You should review your policies to see how such an event would be covered.

4. a -- While an umbrella policy does not provide additional physical damage coverage to property owned by the insured, it does provide additional liability coverage over and beyond the primary coverage limits for auto and homeowner/renter's insurance policies.

5. b -- Insurance policies do not require beneficiaries to be related to the policyholder. You should always remember to update your beneficiaries when a life-changing event occurs, such as marriage, divorce, or the birth of a child.

6. c -- You must pay the full cost of coverage and may have to pay up to an additional two percent for administrative fees. Under COBRA, you have the option to continue coverage for up to 36 months in New York.

7. a -- Short-term disability provides a percentage of your income based on your individual policy limits if you are unable to work for a short period of time due to illness, the birth of a child or an injury (excluding job-related injuries covered by workers' compensation insurance).

8. b -- No. While open enrollment allowing for most plan changes is usually held once a year, certain exceptions apply for new employees or employees with life-changing events, such as pregnancies or marriage.

Consumers who need help understanding their insurance needs should contact their insurance agent, broker or company. They should always feel free to use Insurance Department consumer resources. Detailed information on insurance is available on the Department's website, www.ins.state.ny.us. Consumers may also speak with Consumer Services Bureau personnel between 9 a.m. and 4:30 p.m., Monday through Friday toll-free at 800-342-3736.