More than half (53%) of UK drivers don’t know what their car insurance policies cover them for, because of unclear terms and conditions, according to new research, meaning UK drivers could be wasting millions of pounds on unfit-for-purpose policies.
The study, commissioned by flexible car insurance provider Cuvva, also found that, because of the complex and lengthy nature of these policy documents, almost two-thirds (63%) of drivers said they don’t read their policy documents in detail.
And, with more employees expected to return to work from 1st August, drivers are facing the alarming proposition that their policy agreements could be invalid if commuting is not included, should they opt to drive to work to avoid public transport.
Freddy Macnamara, founder of Cuvva commented: “It’s unfair to put the onus on consumers to decipher unnecessarily complicated offerings and policy documents, to figure out what they should or shouldn’t be covered for. Insurers are known to operate unfairly, combine this with their lack of transparency – it’s easy for drivers to opt for cover that’s not necessarily best suited towards their needs.”
Annual renewal loyalty penalties
Given people largely describe car insurance as “complicated”, “daunting’ and “time-consuming”, it’s not surprising that over a quarter (28%) of drivers surveyed admitted that they’ve stuck with the same provider in 2020, despite unfair annual price hikes averaging £72. If compared with the average annual increase in 20193 (£41), drivers continue to pay more to renew their cover in the first half of the year.
Worryingly, in some cases, increases have been significantly more. The highest car-renewal premium quote that a survey respondent received this year, rose by a staggering £1,300.
Freddy continued: “UK drivers are continuing to pay loyalty penalties in 2020 when they renew their car insurance, due to the industry’s major pricing inconsistencies. Besides it being the right thing to do, the only way insurers will improve people’s perceptions of the industry on the whole – is if they come to the party, make insurance less daunting and start treating customers fairly.”
When it comes to the drivers that are hardest-hit, those in Nottingham, Manchester and London are most likely to be paying the highest amount extra for the same policy. These regions saw an average annual premium increase of £84.
“Insurance is there to protect those that are unlucky. Not knowing what you’re covered for can prove costly, especially if you need to make a claim. Buying car insurance shouldn’t be so complicated and paying more than you should at renewal time is totally unfair. The industry is starving for modernisations, that’s why we’re on a mission to make insurance radically better, by building products that are fair, flexible, and way better suited for the 21st century,” says Macnamara.
For more information on what to look for when buying car insurance, visit: https://www.cuvva.com/car-insurance/temporary/insights/what-to-look-for-when-buying-car-insurance