New Car Owners Lack Insurance Knowledge

NU Online News Service, Jan. 14, 8:50 a.m.EST?A survey has found that although new car owners arevery well-informed about various features of their vehicles, theyare much less knowledgeable about one critical aspect ofmaintaining automobiles: insurance coverage.[@@]

The survey, by the Progressive group of insurance companies,found that nearly all drivers who recently bought new cars werefamiliar with many details of the vehicle. For example, 98 percentof those surveyed said they know their new car's transmission type,and 91 percent knew how many cylinders their car had. And at 99percent, nearly all of the respondents surveyed said they knew howmany airbags their new car had and where they were located.

On the other hand, 51 percent of those surveyed said they didn'tknow the amount of bodily injury liability coverage they had forone person, while 62 percent didn't know their liability coveragelimits per accident. The survey, conducted from Dec. 16 to 30 lastyear, consists of responses from 500 new car owners.

According to the survey, 87 percent of drivers surveyed said thecost of auto insurance was not a factor in deciding whether to buya new car or which model to purchase. Furthermore, some 30 percentof those surveyed didn't even know how much they paid every sixmonths to insure their newly purchased vehicle.

Tom Hollyer, product development manager at Mayfield Village,Ohio-based Progressive commented that while buyers put lots ofthought into what features they want in their new vehicle, "oursurvey showed that many new car buyers don't pay as much attentionto their car insurance."

Mr. Hollyer advised that new car buyers should clearlyunderstand how the make and model they choose affect theirinsurance premium. "That's because rates are determined not only bydriver characteristics such as age and gender," he explained, "butalso by vehicle characteristics, which generally include the car'smake, model and year, weight, horsepower, body type, wheel base,and vehicle type."