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Consumers’ Insurance Literacy

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  • Sharon Tennyson

Abstract

Research seeking to understand financial literacy and to enhance it through training or education is receiving greater attention and emphasis from policymakers. Unfortunately, relatively little of this research has focused on insurance products and consumers. This policy brief reviews what is known about consumer knowledge, understanding and capability in insurance markets, focusing on two surveys of consumers’ understanding of insurance policies, terms, and concepts. Insurance disclosures and policy language are discussed in light of this evidence, and suggestions for future insurance literacy research and education are provided.

Suggested Citation

  • Sharon Tennyson, 2011. "Consumers’ Insurance Literacy," NFI Policy Briefs 2011-PB-06, Indiana State University, Scott College of Business, Networks Financial Institute.
    • Handle: RePEc:nfi:nfipbs:2011-pb-06
    as

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    File URL: http://www.indstate.edu/business/sites/business.indstate.edu/files/Docs/2011-PB-06_Tennyson.pdf
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    References listed on IDEAS

    as
    1. D'Arcy, Stephen P & Doherty, Neil A, 1990. "Adverse Selection, Private Information, and Lowballing in Insurance Markets," The Journal of Business, University of Chicago Press, vol. 63(2), pages 145-164, April.
    2. Sharon Tennyson, 2010. "Rethinking Consumer Protection Regulation in Insurance Markets," NFI Policy Briefs 2010-PB-07, Indiana State University, Scott College of Business, Networks Financial Institute.
    3. Johnson, Eric J & Hershey, John & Meszaros, Jacqueline & Kunreuther, Howard, 1993. "Framing, Probability Distortions, and Insurance Decisions," Journal of Risk and Uncertainty, Springer, vol. 7(1), pages 35-51, August.
    4. Nicola Gennaioli & Andrei Shleifer, 2010. "What Comes to Mind," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 125(4), pages 1399-1433.
    5. Levon Barseghyan & Jeffrey Prince & Joshua C. Teitelbaum, 2011. "Are Risk Preferences Stable across Contexts? Evidence from Insurance Data," American Economic Review, American Economic Association, vol. 101(2), pages 591-631, April.
    6. Annamaria Lusardi, 2006. "Financial Literacy and Financial Education: Review and Policy Implications," NFI Policy Briefs 2006-PB-11, Indiana State University, Scott College of Business, Networks Financial Institute.
    7. Stefano DellaVigna, 2009. "Psychology and Economics: Evidence from the Field," Journal of Economic Literature, American Economic Association, vol. 47(2), pages 315-372, June.
    8. Matthew Rabin, 1998. "Psychology and Economics," Journal of Economic Literature, American Economic Association, vol. 36(1), pages 11-46, March.
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    Cited by:

    1. Carolyn Kousky & Noelwah R. Netusil, 2023. "Flood insurance literacy and flood risk knowledge: Evidence from Portland, Oregon," Risk Management and Insurance Review, American Risk and Insurance Association, vol. 26(2), pages 175-201, July.

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