Which? has found that car insurance customers do not have to sacrifice quality for affordability during the current cost of living crisis, as it reveals the results of its annual best car insurance provider survey.
The consumer champion analysed dozens of insurance providers and surveyed thousands of customers to find out which policies offer the best cover and service – as well as what they can offer consumers on tighter budgets.
The analysis involved Which? rating 78 policy features – including excesses, admin fees, and how long each insurer will guarantee the repairs it arranges – and also surveying 2,454 insurance customers who had claimed with their provider in the previous two years.
The 55 policies Which? looked at were given both a policy score, based on a provider’s standard policy as well as a customer score, reflecting how satisfied claimants were with their insurer and how likely they would be to recommend it.
Five insurers, LV, NFU Mutual, Direct Line, Churchill and Aviva, were awarded the coveted Which? Recommended Provider (WRP) status. All of the WRPs received either four or five stars out of five for providing good value for money, fair treatment of long-standing customers and how well they dealt with queries and clarity of policies.
LV was awarded the highest customer score, receiving 79 per cent. It also scored the best policy score, achieving 77 per cent. It was commended for guaranteeing its repairs for a vehicle’s lifetime and was one of only 11 to offer the policyholder a temporary replacement car if theirs is stolen.
NFU Mutual has received WRP status for each year the survey has run and was one of only two providers Which? analysed that does not charge a cancellation fee or interest if customers want to pay monthly. It came second overall with a customer score of 78 per cent.
The Which? survey indicated that consumers do not necessarily have to pay more for quality. A third (35%) of LV claimants surveyed and three in 10 (29%) of Direct Line customers were more likely to feel they were paying a less expensive price compared to what was on offer elsewhere. A quarter (26%) of Churchill customers reported this, which was in line with what was typical across all providers.
Coming at the bottom of the car insurer rankings was Halifax, which received a total score of 60 per cent. It was given just two out of five stars for ease of managing the policy online. Esure was given the second-lowest total score of 63 per cent. It was similarly marked down for the ease of managing the policy online, scoring just two stars.
Notably, over-50s specialists Saga and AXA featured near the top of the table but missed out on WRP status. Both had impressive policy scores but received middling customer scores from policyholders – which were not high enough for the WRP badge.
Overall, nine in 10 (88%) car insurance claimants felt they were getting good value for money, according to 1,858 claimants questioned about pricing and value in the survey. Six in 10 (61%), believed they were paying about the same for cover with their current insurer as they would be offered elsewhere. A quarter (26%) believed they were getting a less expensive price, while one in 10 (12%) felt they were paying a more expensive price.
Tesco Bank customers, around four in 10 (44%), were most likely to say they were paying less than they would elsewhere, while AA customers were most likely to say they were paying a higher amount (25%).
Since January 2022, insurance companies have been prevented by the Financial Conduct Authority from offering new customers special discounted rates for car insurance, supposedly putting an end to the widespread practice of ‘price walking,’ which meant customers were charged more the longer they stayed loyal to their insurer.
However, there are a range of factors, including the cost of repairing vehicles caused by a shortage of semiconductors, that industry leaders argue have increased costs and led to insurers pushing up premiums. The consumer champion is therefore urging customers to shop around to make sure they find a deal that is right for them before committing.
Even if customers are happy with their current provider, haggling remains an effective option when it comes to trying to reduce bills.
Jenny Ross, Which? Money Editor said:
“With premiums up and the cost of living crisis continuing to hit household budgets, our research shows that insurance customers don’t necessarily have to sacrifice quality for affordability.
“Taking the time to find a policy that’s right for you could save you money, as you’re less likely to end up paying for cover you don’t need.
“For those who aren’t satisfied with their current provider, it could be time to haggle or switch to get a better deal. ”
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Notes to editors:
- Which? surveyed 2,454 car insurance customers who had claimed with their insurer in the previous two years. Fieldwork was carried out online by Dynata in November 2022. The Customer Score is based on how satisfied claimants were with the insurer and how likely they would be to recommend it. Sample sizes shown in brackets.
- To qualify as a Which? Recommended Provider, insurers needed to have a statistically high customer score and at least average levels of cover in their standard policy.
- Direct Line achieved a customer score of 78 per cent and an above-average policy score of 68 per cent. It scored highly for its approach to protecting no-claims discounts – for example not reducing no-claims discounts for customers making vandalism claims.
- Churchill received the third-highest customer score of 75 per cent and, like Direct Line, takes a fair approach to customers’ no-claims discounts. Aviva, the fifth WRP this year, achieved a strong customer score of 74 per cent.
- RAC missed out on WRP status, despite achieving an impressive customer score of 75 per cent, it fell short in Which?’s policy score analysis, securing a lower-than-average mark of 56 per cent for its standard policy.
Which? advice for getting the best cover:
- Negotiate Whoever your insurer is, it’s always worth picking up the phone at renewal time to see if your premium can be improved. Last year, almost half of Which? Members who haggled brought down their premium by doing so, saving £56 on average.
- Ditch the bells and whistles Depending on your needs, you might not need all the features offered with policies, so think carefully about the importance of different add-ons offered on your way through a quote. For example, enhanced hire car cover might not be essential if you have access to another vehicle or can easily stay mobile while yours is in the garage.
- Mind the gaps While a policy with redundant add-ons could be a waste of money, be aware of what’s missing in the very cheapest policies. For example in our analysis, we found some policies that come without cover for glass damage. However, in our surveys of claimants, we found windscreen and window damage claims to be the second most common reason policyholders called their insurers.
Right of replies:
AA said: “The majority of our customers feel that our market leading car insurance is competitively priced as it gives them peace of mind and provides the confidence to know they are in safe hands. While other policies are removing things like windscreen cover, we want to ensure our customers are comprehensively covered in their hour of need.
“Having been awarded a five star Defaqto rating 14 years in a row* while being ranked ‘excellent’ by customers on Trustpilot**, we continue to invest and improve our policies so we are always ahead.”
Esure said: “We are disappointed by these scores. We take customer feedback very seriously and our teams will continue to work hard to deliver the best customer service, as we embed our new industry-leading technology platform which will offer an enhanced experience for all of our customers.”
Halifax said: “We don’t underwrite or distribute car insurance directly, but leading intermediary BGL Insurance manages a panel of insurers to offer products on our behalf. Policyholders can manage their insurance online and we have new features in the pipeline based on customer feedback.”
Which? is the UK’s consumer champion, here to make life simpler, fairer and safer for everyone. Our research gets to the heart of consumer issues, our advice is impartial, and our rigorous product tests lead to expert recommendations. We’re the independent consumer voice that influences politicians and lawmakers, investigates, holds businesses to account and makes change happen. As an organisation we’re not for profit and all for making consumers more powerful.
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