Financial responsibility laws vary by state, but all involve an amount of money for each person injured in an accident, a total amount for all
persons injured in an accident, and a separate amount for damage to property.  The most common method used to demonstrate financial
responsibility is with an automobile insurance policy.
New York State Financial Responsibility Law REQUIRES proof of auto insurance when operating a motor vehicle.

An insurance policy is a legal contract
between the policyholder (you) and the insurance company.

The contract states that in exchange for a premium
(your cost for the policy), the company promises to pay for
a covered claim.

A Pilot Study of Personal Auto Insurance Literacy and its Potential Relationship with Self-Efficacy and Channel Selection  

Rationale: Every day consumers make difficult purchasing decisions about personal insurance products - decisions that potentially have a direct impact on their financial condition.  The objective of this exploratory pilot study is to observe if there is a relationship between consumer's knowledge of personal auto insurance, perceived self-efficacy and the search and purchase channel utilized to secure insurance coverage.  As financial laws vary by state, it should be noted that New York State personal auto insurance will be the basis of this inquiry.  The study will be conducted through a survey instrument as well as follow up interviews for a deeper understanding of how knowledge of auto insurance was obtained (i.e. financial literacy education, claim involvement, family, friends, insurance agent or broker; media, websites…)  

What is the consumer's perception of their knowledge of personal auto insurance?
How literate are consumers about personal auto insurance?
What channels were utilized in obtaining quotes and purchasing auto insurance?
Are consumers more literate that seek and purchase online vs. offline or cross channel?
Are consumers more confident that seek and purchase online vs. offline or cross channel?

This study develops a survey to include demographic characteristics of respondents and poses questions related to consumer's confidence, knowledge and purchase process.  As an objective measure, the respondent will be as asked his/her confidence with regard to premium determination and coverages prior to the knowledge section as to not affect confidence perception due to how respondent performed on survey. A likert scale of 1-5, with 1 being not knowledge and 5 very knowledgeable, will be used to gage self confidence.

The knowledge section of the survey will be presented in two parts. The first part will be a series or 10 True or False questions related to how premiums are determined.  The second part will be a series of 10 multiple choice questions specific to a typical auto insurance policy utilizing claim scenarios and knowledge of common New York State coverages.
The potential associated relationship(s) between auto insurance literacy, self-efficacy and search and purchase channel will be examined through multivariate analysis.  

Distribution Channel/Method of Purchase
Level of Knowledge
Multiple Choice:
% of Correct Answers
 Part 1: How Much Does it Cost?(How premiums are determined)
Level of Knowledge
Multiple Choice:
% of Correct Answers
Part 2: Am I Covered?
(Auto Insurance Coverage Questions)
Pure offliners: Search offline; buy offline
Pure onliners: Search online; buy online
Cross-channel offliners: Search online; buy offline
Cross-channel onliners: Search offline; buy online
Dual-search offliners:
Search online and offline: buy offline
Dual-search offliners:
Search online and offline: buy online

Theoretical Framework:  Social Constructivism and Auto Insurance Literacy
It is through shared understandings, which occur from interaction with others, that social meanings and realities are shaped. Individuals continually assimilate information from their environments and adjusting or accommodating in order to create new knowledge that fit with the world around them (Green, 1990)

Survey Consent Form:

My name is Lorraine Emerick.  I am a graduate student in the Educational Theory & Practice  Program at the University of New York at Albany.  I am conducting a survey as part of an independent study, supervised by Dr. Yagelski.  If you are at least 18 years old, you are eligible to participate in the survey.

The survey involves answering questions about your knowledge of personal auto insurance coverage.  The survey takes about 20-30 minutes to complete.  The purpose of the survey is to help learn more about consumers' auto insurance literacy.  Your participation is completely voluntary and your responses will be completely anonymous. There are no known risks if you decide to participate in this research study, nor are there any costs for participating in the study.    There are no consequences if you decide not to complete the survey.  

If you agree to complete the survey, please do NOT write your name on it.  After you finish filling it out and please put the survey in the envelope provided.  By filling out the survey you are consenting to participate.  

If you do not want to complete the survey, just return the blank form and envelope.

The results of the study will be used for scholarly purposes only and will be presented in educational settings.

This project has been approved by _______________ and can answer questions about your rights as a volunteer participant in this project.  

If you have any questions or concerns about completing the questionnaire or about being in this study, you may contact me at (518)441-6024 or at

Please keep this letter for your records.  Thank you for your participation.

IRB Course Passed (Ref # 1168740)

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