Studies Show Drivers Don’t Understand Auto Insurance: Why It Matters And What Needs To Be Done


A recent survey has found that most drivers don’t understand their car insurance policies, with 49% thinking it includes the fictitious ‘extended crash protection and 41% believing that they are covered for vehicle emissions, which is not and has never been an option. Some do not know that there are different types of car insurance, like a classic car insurance, if one owns a vintage or older car.

The lack of understanding about how vehicle insurance works could account, in part, for the fact that 14% of all drivers in the US don’t have any coverage at all, which is a staggering and frightening statistic.

Each state has its own punishment for driving without insurance, but most are limited to a suspension of the license until proof of a policy can be provided. Only 14 states can jail drivers who don’t have valid insurance and only Connecticut jails drivers without cover for more than 1 year.

Understanding Types Of Auto Insurance

Basic car insurance coverage usually offers financial protection for cars that are damaged or stolen, third-party cover for any damage to property or persons caused by an accident, and personal injury care if you or your passengers are harmed in a crash.

Additionally, there are dozens of add-ons you can use to ensure that you’re covered in case of a specific type of accident or to deal with your unique situation. Provider The Hartford is dedicated to educating drivers on the types of insurance on offer and has created a glossary of terms for the different types of car insurance available.

Among the most common include:

  • Collision Insurance
  • Gap Insurance
  • Full Glass Coverage
  • Medical Payments Coverage For Auto
  • New Car Replacement

The type of cover needed depends on a driver’s unique needs: for example, drivers who finance their cars will need gap insurance to cover the remainder of their loan if their vehicle is damaged, whereas owners who have paid in full won’t require this form of cover.

Drivers need to be aware of the types of coverage available to them and the ones that will ensure that they’re prepared for any eventuality on the road.

What Needs To Done To Improve Driver Awareness

Currently, many car insurance providers are clear on transparency and offer definitions of the types of insurance drivers can take out, with market leaders the Hartford aiming to provide help to the senior community, as evidenced already.

Still, more needs to be done to ensure that drivers have a complete understanding of auto insurance and the laws around it. This means providing more incentives in the form of punishment for uninsured drivers and pushing to get more intensive driver training on the importance of the right insurance policy.

Driving test centers need to be adding more materials on auto insurance to their curriculums so that learner drivers need to study policy options and learn how to read insurance documents before they can get their licenses.

Younger drivers are most likely to have issues understanding their policies, as outlined by the study from Forbes, so parents and guardians need to take an interest in their knowledge and help them to pick out the best policy option. These changes should help young drivers to grasp the coverage they can get and what it entitles them to.

Conclusion: Roadways Will Be Safer If Drivers Understand Policy Options

Driving without auto insurance is not only illegal but also immoral. Even drivers that have a valid policy but don’t realize what it covers, or don’t have enough coverage to deal with any of the issues they might face, could potentially cause an accident that they’re not covered for and can’t afford to deal with themselves.

Insurance companies are helping to inform drivers, but major changes in the ways that States deal with uninsured drivers and the way tests are delivered could ensure that drivers understand this vital part of owning a vehicle. In 2022, the National Highway Traffic Safety Administration estimates that approximately 42,795 people died in car accidents, so any small ways we can reduce this number will benefit the population and society as a whole.

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