Drivers struggle to understand the terms used in their car insurance policy

(25/11/2009)

According to research by swiftcover.com, almost one in five drivers (18%) think car insurance policies are purposely designed to confuse them. The survey found that 42% of Brits struggle to understand the terms used in their car policy, leaving them uncertain over what they are actually covered for.

Nearly a quarter of people (23%) have no idea what voluntary excess means, despite the fact that many people increase their voluntary excess as a way to reduce the cost of insurance premiums. However, swiftcover.com’s research also revealed that 17% of motorists never bother to read their insurance policies in the first place.

Tina Shortle, marketing director of swiftcover.com, explains: “Some drivers struggle with the terms used in their insurance, but it’s vital that they read and understand their insurance policies so they know exactly what they are covered for. swiftcover.com’s online Jargonbuster makes insurance terms clearer and ensures drivers get the right cover and best value insurance for their needs.”

swiftcover.com’s research found:
• 17% of drivers wrongly believe that fully comprehensive means they can drive any car
• 9% think fully comprehensive means anyone can drive their car
• 13% of people think social, domestic and pleasure use covers any journey, so long as they are for fun!
• 4% think only journeys after 6pm and at weekends are covered by the term social, domestic and pleasure use
• 51% do not know that material fact is the information that you give to your insurer that could affect your insurance policy, such as having points on your licence

Perhaps most worryingly, 18% of drivers believe that insurers deliberately use jargon to confuse their customers. Shortle say: “Car insurance is very complex, so this means that the wording used in policy terms and conditions can be fairly complicated. Because we are dedicated to making people’s lives easier and hassle-free, we are launching the swiftcover.com Jargonbuster to explain in simple language what these terms mean.”

swiftcover.com’s research found that nearly half (46%) would find a Jargonbuster useful, while over a third (35%) of people say they would be more likely to use an insurer that better explained the jargon it used. Using swiftcover.com’s Jargonbuster – available at www.swiftrelief.co.uk/jargonbuster.aspx – drivers simply input the term they are unsure about and they will get a plain English explanation.

Some of the jargon that confuses drivers:

Voluntary excess: 23% have no idea what it means, whilst nearly one in three drivers (29%) wrongly assume that voluntary excess is the amount of money you can choose to pay towards a claim on top of your compulsory excess, but only if you want to. However, voluntary excess is actually the amount you must pay towards a claim on top of your compulsory excess. The amount of voluntary excess is selected by the consumer when they take out their policy, and a higher voluntary excess usually means a lower premium.

Fully comprehensive or fully comp: 17% of drivers think fully comp means you can drive any car, while 9% mistakenly believe it means anyone can drive your car. Fully comprehensive insurance actually means that, when driving your own car, you are covered for any damage caused to your car, other cars damaged by your vehicle, and injury to yourself or others.

Social, domestic and pleasure use: 13% think this means that any journey is covered, so long as it is for fun, whilst 4% think it means only journeys after 6pm and at the weekends are covered. Social, domestic and pleasure use actually means you are covered for non-related work journeys as well as journeys to and from one place of work.

Material fact: Less than half of those surveyed (49%) knew that material fact is the information that you give your insurer that could affect your insurance. Modifications to your car or points on your licence are material fact so it is imperative to let your insurer know about these – including when your circumstances change whilst your insurance policy is in place – or your policy may become invalid.

Non-fault claim: More than one in five drivers (22%) had no idea what a non-fault claim is, with only 62% correctly thinking it to be a claim where your insurer is able to reclaim the full cost of a claim from another driver involved in the incident that led to the claim.

Related categories:  Bike insurance   Car insurance 

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