Do you find car insurance too confusing? - Car insurance - News - Moneyfacts

News

Do you find car insurance too confusing?

Do you find car insurance too confusing?

Category: Car insurance

Updated: 02/06/2016
First Published: 02/06/2016

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Car insurance is an essential purchase for all drivers, but it looks as though many people find it confusing, with the Co-op Insurance calling for things to be made simpler as a result.

Their research found that over half (51%) of respondents don't understand how their premium is calculated, while two-fifths didn't know why their premiums may fluctuate year to year and 36% don't understand their policy price in relation to their vehicle.

Many aren't aware of what their insurance covers, either, with 42% not realising that it's there in case another driver claims for personal injury as a result of an accident that's their fault. Overall, 48% of motorists questioned admitted that they find car insurance confusing, with an overwhelming majority (86%) believing that it needs to be easier to understand.

Perhaps unsurprisingly, many people begrudge paying for cover, with 43% saying it's a grudge purchase and 15% saying they wouldn't buy car insurance if it wasn't a legal requirement. This is another reason why making the advantages of car insurance more transparent would be beneficial, and is why Co-op Insurance is launching its own campaign to explain how insurance pricing works.

The series of videos and online tools explain, for example, that a quarter of a car insurance premium goes towards costs if a driver injured others, while a fifth of the price goes towards repairing damage to other people's property. Another fifth also goes towards a policyholder's own car to cover things such as theft of the vehicle or car repairs, and it also outlines business costs and Insurance Premium Tax.

James Hillon, Products and Pricing director at Co-op Insurance, said: "Motor insurance can be complex and the research has found that drivers are often confused by it… we hope that by explaining insurance it will help drivers to understand the value they get and reduce the chances of them deciding to go without insurance."

As James says, uninsured drivers have an impact on the cost of insurance generally, and can also lead to unfair situations with honest road users if they're involved in an incident, so it's absolutely vital that you're fully covered. Read our guide
to get a better understanding of car insurance and hopefully reduce some confusion, and make sure you've got the cover that's right for you by using our handy quote tool.

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

Related Articles

Black Friday sees increased motor incidents

Today can be a day of big savings, but it could also end in tears, as research has revealed that motor incidents were up by 8.5% on Black Friday last year. It’s therefore extra important to keep an eye on traffic today, not just on bargains.

Whiplash crackdown could cut car insurance costs

Whiplash claims have rocketed in recent years, and they’re driving up the cost of car insurance. So it’ll come as welcome news that the Ministry of Justice is stepping in, and will hopefully reverse the trend.

Be extra cautious on the roads today

Today may be Halloween, but it’s also the first Monday after the clocks go back. According to Admiral, this traditionally sees a higher number of incidents on the road, and the insurer is urging motorists to exercise extra caution as a result.
 
Close