Understanding the Insurance Knowledge Gap Among Gen Z

April 3, 2025||inPersonal Insurance|homeowners insurance, personal insurance, renters insurance

A recent 2024 survey from the National Association of Insurance Commissioners (NAIC) sheds light on the current state of insurance knowledge among Gen Z adults. While 35% of Gen Z individuals pay for cellphone protection plans, only 21% have renters insurance. This lack of coverage may stem from a deeper misunderstanding of the risks they face and why having the right insurance matters. The survey highlights an important issue: many young adults feel overwhelmed or anxious when it comes to dealing with insurance.

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Over half of respondents (54%) admitted that the thought of handling insurance makes them feel uneasy. A significant portion of Gen Z, about one-third (34%), said they plan to wait as long as possible to get life insurance, with 28% expressing the same sentiment about health insurance. Additionally, only around 1 in 4 Gen Zers could correctly define common insurance terms like “deductible” (27%) or “copay” (29%), and 22% of them had little to no understanding of the importance of auto insurance. This reveals a concerning gap in insurance knowledge, which can lead to missed opportunities for protection and financial security.

However, there is some positive news. The survey found that 61% of Gen Z adults already pay for their own health insurance, and 49% carry automobile coverage. These figures show that while there’s work to be done, there is also a solid base to build on as we aim to close these gaps in understanding and coverage.

The NAIC also pointed out that a lack of insurance knowledge is not exclusive to Gen Z. A study by Trusted Choice revealed that even consumers who consider themselves knowledgeable about insurance often misunderstand key aspects of their coverage. For instance, over half of respondents didn’t realize that a standard homeowners policy doesn’t cover flood damage, and 70% didn’t know that it wouldn’t cover materials for home renovations. In the case of auto insurance, many people mistakenly think their personal auto policy will cover personal items stolen from their car, when in fact, homeowners or renters insurance typically covers this.

How Can You Build Better Insurance Knowledge?

If you’re feeling confused about insurance, you’re not alone. The good news is you don’t have to figure it out on your own. Independent insurance agents are here to help clarify the different policies available, explain what they cover, and ensure you’re making the best choices for your needs. Gen Z, like many others, can benefit from reaching out to a trusted insurance professional to better understand their coverage options and make informed decisions.

At Murphy Insurance Agency, we specialize in simplifying insurance for individuals of all ages. Whether you’re just starting to consider your options or are looking to update your existing coverage, we’re here to answer your questions and guide you through the process. Don’t let confusion hold you back—contact us today to learn more about how you can protect your future with the right insurance coverage.

Sources: National Association of Insurance Commissioners & Trusted Choice

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