Let’s be honest, when buying car insurance, it’s quite common to just quickly skim over the fine print. This could prove to be a costly mistake in the long run.
According to new research by consumer website Which?, motorists who do not check their policies carefully could face hefty bills if things go wrong. This is due to a large number of policies having ‘loopholes’ or exclusions for certain types of cover. Here’s the lowdown.
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Car insurance loopholes: why do drivers need to read the small print?
Consumer website Which? analysed 49 car insurance policies from 34 different insurers and found that the breadth of coverage varied significantly, with some policies not providing cover for several common and, quite honestly, basic problems.
Failing to notice these exclusions could end up costing you down the road, as you would have to pay for whatever is not covered.
What are the most common car insurance loopholes?
Which? discovered that almost all policies provide some form of personal belongings cover. However, a significant number of specific personal belongings were not covered.
For instance, only two policies provided cover for cash and documents, while only three provided cover for credit cards. Additionally, four in ten (40%) excluded mobile phones.
Legal expenses cover was also discovered to be woefully inadequate among existing policies.
For example, only a quarter of policies (24%) will pay to recover illegal clamping or towing fees. Meanwhile, only three in ten (31%) will cover the legal costs associated with licence plate cloning.
Drivers should also check whether they have misfuelling cover. Though the majority of policies (69%) offer help if you fill your petrol tank with the wrong fuel, only one in five (18%) will help you to drain the tank and repair the engine.
While almost all policies include some form of courtesy car cover as standard, only 20% will give you a temporary replacement if your car is stolen.
According to Which? the rarest feature offered by insurers is guaranteed cover for driving other cars. They found that in more than a third (37%) of policies, it only applies in emergencies.
Here’s the full list of elements least likely to be covered by your car insurance policy, according to Which?.
|
Rank |
Coverage |
Percentage of policies |
|
1 |
Guaranteed cover for driving other cars |
2% |
|
2 |
Personal belongings – cash |
4% |
|
3 |
Personal belongings – documents |
4% |
|
4 |
Personal belongings – credit cards |
6% |
|
5 |
Misfuelling (fuel drainage and engine damage) |
18% |
|
6 |
Legal expenses (as standard) |
20% |
|
7 |
Replacement vehicle (total loss as standard) |
20% |
|
8 |
Misfuelling (fuel drainage) |
20% |
|
9 |
Temporary replacement vehicle for a stolen car (as standard) |
22% |
|
10 |
Legal expenses – illegal clamping or towing fees |
24% |
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What else do you need to know about car insurance?
Commenting on these findings, Jenny Ross, Which? Money Editor, said: “Our research shows that motorists risk facing hefty bills when things go wrong as a large number of policies don’t cover incidents or possessions you might expect. With the cost of living biting, this means car problems could be disastrous for those on low incomes or with limited savings.”
She advises drivers to read the fine print and choose the policy that best meets their needs rather than the one that appears to be the cheapest.
“If you’re comparing two similarly priced policies, the bills you can rack up by falling foul of car insurance loopholes could dwarf the extra amount you would pay for the more expensive cover,” says Ross.
Meanwhile, if you’re dissatisfied with how your insurer handled a previous claim, or if you’ve incurred a large bill due to a certain issue not being covered by your current provider, don’t hesitate to shop around for a new one when it’s time to renew.
A good place to start is with reputable insurance comparison platforms like MoneySuperMarket Car Insurance, and Confused.com Car Insurance.
As Ross rightly states, “You could save hundreds of pounds by switching insurers while getting the right cover to suit your needs.”
