NAIC Survey: Gen Z Shows Limited Understanding of Insurance

The National Association of Insurance Commissioners (NAIC) recently did a survey of Generation Z adults and found their insurance knowledge to be — at best — lacking. The age range for Gen Z is 12 to 27 and the survey focused on those 18 to 27.

NAIC President, and Connecticut Insurance Commissioner Andrew Mais said the survey found that 35% of the Gen Z adults are currently paying for a smartphone protection plan but only 21% of them have renters insurance.

Mais said it is likely many of them don’t understand their risks, and why having the right insurance coverage is important. Another reason might be found in the 54% who say the thought of dealing with insurance makes them “overwhelmed or anxious.”

A third — 34% — say they’re going to try to wait as long as possible to get life insurance and 28% feel the same about health insurance.

As for being able to understand and define insurance terms:

• Only 27% correctly defined the term deductible
• Just 29% know what a copay is
• Only 36% know what out of pocket means
• Just 19% know what out of network means
• 22% have little — or no — awareness of why it’s important to have auto insurance
• 14% have have little or no awareness of the importance of health insurance

“Our survey also revealed some encouraging findings about Gen Z. For example, 61% of Gen Z adults surveyed already pay for their own health insurance, while 49% carry automobile coverage,” Mais said. “There are several areas where we have a solid base to build on as we 'Mind the Gap,' or help close protection gaps and ensure more people have the coverage they need.”

The survey contacted 1,003 Gen Z people and asked them to complete the following sentence so that it most closely resembles how you feel: The thought of dealing with insurance makes me feel:

• 54% — 543 people — answered overwhelmed or anxious
• 38% — 384 people — said it makes them feel responsible
• 38% — 381 people — said it makes them feel overwhelmed
• 32% — 323 people — answered just anxious
• 22% — 220 people — said they feel frustrated
• 18% — 181 people — feel grateful
• 14% — 141 people — answered it makes them feel old
• 3% — 35 — none of the above

Source: NAIC — https://bit.ly/4bYRFoh