The latest research from Defaqto for you;
The UK’s largest motor insurance providers have made significant progress in presenting information to customers during the online quote-and-buy process, but important gaps remain in helping consumers understand the financial consequences of the choices they are making, according to new research from Defaqto.
The in-depth study, released today, found that the market still struggles to explain the areas with the greatest financial impact on customers and where Consumer Duty places emphasis on informed decision-making. These include the true cost of paying monthly, the presentation of auto-renewal, cancellation costs and the practical impact of policy excesses.
Key findings include:
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Unexpected costs at claim time: Few buying journeys currently show what an excess means in practice or explain clearly when it is paid. Customers are often unable to judge at the point of purchase whether they could afford to make a claim.
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Cancellation costs remain unclear: Most journeys don’t yet show customers what they would receive back if they cancelled their policy, meaning they commit to cover without fully understanding the financial implications.
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Customers risk paying twice for cover: On the add-ons most commonly duplicated elsewhere – including legal expenses, breakdown and personal accident cover – most do not warn customers they may already have this protection. The study identified this as one of the most significant Consumer Duty risks.
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Customers can end up paying more than they realise: presenting the auto-renewal decision fairly, and showing the added cost of paying monthly before optional extras are added, remain rare across the market. As a result, customers can end up with cost commitments they never actively chose.
Sam Leonard-Williams, Product Director at Defaqto, said: “In a quote journey, insurers are trying to do several things at once – convert the customer, explain a genuinely complex product, and often introduce add-ons on top. That’s a real balancing act, and I have sympathy for how hard it is. But our research shows the balance is too often tipped towards presenting information rather than helping people understand it – and access and understanding are not the same thing.
“Across the 25 journeys we assessed, scores ranged from 39.5 to 79.8 out of 100 – a gap that shows just how much a customer’s experience still depends on which provider they happen to choose. No single provider performed strongly across every part of the journey. But – and this is the crucial point – in every area we measured, at least one provider was doing it well. So we’re not setting an unrealistic bar; we’re pointing to what’s already being achieved elsewhere in the market.
“Too many journeys still leave customers to work out for themselves what paying monthly will really cost, what an excess means in practice, or whether auto-renewal is right for them. These gaps are hard to catch through the usual post-purchase feedback, because a customer often can’t tell whether they bought the right cover until the moment they come to use it – and by then it’s too late.
“Making information available is no longer enough. The firms that can show they are genuinely helping customers understand what they’re buying have a real opportunity – to build trust, reduce compliance risk, and stand out in a market where customers are so often pushed to focus on price alone.”
To download the report, visit here.
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