Car insurance myths put motorists at risk

Millions of motorists could be putting themselves at risk of being under insured and unable to claim following an accident or theft, according to new research by high street insurance broker Swinton.

The survey of more than 3,000 British motorists showed that a third of comprehensive car insurance holders pay little attention to their insurance policy, spending half an hour or less researching different policies (33%), some only skim reading policy wording (25%) and 3 in 10 said that the answers given to questions during the application process may be inaccurate (30%). 

Unsurprisingly, all of this has a knock on effect when it comes to making claims. More than 1 in 10 (13%) who have claimed on their comprehensive car insurance in the last three years said they were dissatisfied with the outcome of the most recent claim they made.

The survey also showed gaps in knowledge around important elements of car insurance policies that could potentially put motorists at risk.

One in three (33%) drivers believe that they are fully covered to drive someone else’s car if they have purchased comprehensive car insurance. A further 14% didn’t know whether you are fully covered or not, meaning just 53% were correct.  ‘Driving other cars’ cover is risk specific and will depend on factors such as driver age and driving experience. The cover provided is also third party only so provides no cover for damage to the vehicle our customer is driving.

By driving another car without insurance – whether knowingly or not – motorists run the risk of an IN10 licence endorsement, meaning six to eight points on their licence and a potential spike in future premiums.

Furthermore, over 4 in 10 drivers (43%) believe that if they are in an accident and another driver is deemed responsible, they won’t need to pay any excess at all, while 16% were unsure about who is responsible for the excess. However, across standard insurance policies, an excess is payable on any claim regardless of fault – though this may be recouped from the other party, depending on circumstances, just over 4 in 10 (41%) answered this correctly.

Another myth that has motorists confused is what happens when your car is stolen. Not all comprehensive or third party fire and theft insurance will automatically cover theft of a vehicle no matter where it is stolen from, yet 39% of those surveyed believed any car insurance policy covers this, and a further 19% didn’t know either way. However, cover depends on individual circumstances, for example, if a policy has been agreed on the basis that a car is kept locked in a garage overnight and the car is then stolen from another location, a claim may not be upheld.

Richard Beaven, Distribution Director at Swinton Insurance said: “We were surprised at just how little attention is being paid to policy documents by motorists, and concerned that so many guestimate answers. The problems this can cause usually only come to light when you need to claim, which can be a difficult time without the added headache of finding you’re not appropriately covered. Not only that, but mistaken claims drive up the cost of motor insurance for everyone – not just those directly affected.

“As an industry, we need to be doing more to help educate motorists about key policy areas to empower drivers to make the right decisions about their individual insurance needs. This will go a long way to providing peace of mind for the nation’s motorists and ensure more affordable premiums. We’d encourage anyone wanting support during their insurance application process to speak to one of friendly team over the phone or in a branch.”