Insurance mythbusters: Which? reveals the misconceptions confusing consumers

A Which? survey reveals the most convincing insurance myths that risk misleading consumers, with most people struggling to unpick fact from fiction.

The consumer champion questioned more than 2,000 members of the public on their insurance knowledge, asking them to answer true or false on eight statements. Their responses revealed people commonly believe insurance myths over facts.

Nearly two-thirds (63%) incorrectly believed that if you leave an insurance contract within the 14-day “cooling-off” period your insurer isn’t allowed to charge you a fee. However, insurers can charge an administrative fee even if a customer leaves within that fortnight.

More than half (55%) thought a “fault” on a car insurance record meant insurers considered the policyholder had caused or was partly to blame for the incident that led to a claim.

In fact, insurers can deem a policyholder at “fault” even if they are not to blame at all, as “fault” simply means that your insurer had to pay out.

No-claims discount protection helps you maintain your no claims discount if you claim, yet half (49%) falsely believed it would prevent the insurer from putting your premium up.

However, insurers can raise premiums whenever they see fit, even if the policyholder has protected their no-claims discount.

A third (35%) thought insurers will pay out the sum to buy a like-for-like replacement if a second-car has been written off or stolen, however, insurers will only compensate the estimated value of a vehicle just before the claim, which may not be enough for a replacement.

When Which? quizzed respondents who answered questions incorrectly about where they had obtained their information, more than half (53%), on average, said “it was just something they’d always heard or thought”. One in seven (14%), on average, said they had been given the information by friends and family.

The ins and outs of an insurance policy can be complex, but making assumptions about what is and isn’t covered is risky and can be costly.

Insurance myths can originate from friends, family and sometimes even current or previous providers so it is important to always check the details of an insurance policy carefully, before jumping to any conclusions.

Jenny Ross, Which? Money Editor, said:

“When it comes to insurance, unpicking fact from fiction can be tricky, and the complex language, exemptions and loopholes can trip up even the savviest customer

“Insurance is there as protection should the worst happen so it is important not to make assumptions or unquestioningly accept what others tell you – instead, do your research and check with your insurer if anything is unclear.”

Notes to editors:

Which? surveyed 2,099 members of the general public on common insurance misconceptions in October 2018. People were asked to answer ‘true’, ‘false’ or ‘don’t know’ to a range of insurance-related questions.

Please see a table below of all the questions asked, how people responded and the correct answers highlighted in bold:

Questions True False Don’t know
‘No Claims Discount Protection’ means that if you make a car insurance claim, the premium you pay the following year won’t be affected. 49% 34% 17%
If your secondhand car is stolen or written off, your car insurer will pay you the required amount of money to buy a replacement of the same make and model. 35% 41% 24%
If you mention holiday plans on social media, insurance companies are allowed to turn down a claim if your home is burgled while you are away. 36% 25% 38%
Even if you make no insurance claims and your circumstances stay the same, your insurers’ estimate of your level of ‘risk’ can change over time. 70% 8% 21%
If you cancel a policy within the “cooling off” period (the first 14 days), your insurer is allowed to charge you a cancellation fee 17% 63% 20%
If you have a ‘fault’ claim on your record, this means the car insurer considers you to have caused or to be partly to blame for the incident that led to the claim. 55% 11% 34%
Four out of every ten travel insurance claims are rejected. 37% 18% 45%
If you weren’t present when your home/ property was damaged unintentionally, then you can’t make an ‘Accidental Damage’ claim for the damage to be repaired or replaced. 19% 46% 35%


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