You are here: Home - Insurance - Understanding -

‘I can’t be charged during the cooling off period’: the insurance myths confusing Brits

Written by:
When you buy a new insurance policy, knowing you have 14 days to change your mind may allay any niggling worries or concerns. But did you know you could still be charged for backing out?

While your insurer is legally obliged to let you leave your contract within the first fortnight, it can still charge you an administrative fee – a fact 63% of people surveyed by Which? didn’t know.

This is just one example of the confusing insurance facts that leave customers out of pocket, according to the consumer group.

More than half of people (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.

Half of the 2,000 people surveyed also incorrectly believed having no-claims discount protection stopped the insurer from increasing your premium. The reality is no-claims discount protection helps you to maintain your no claims discount if you claim.

Meanwhile, a third of people thought insurers would pay out the sum to buy a like-for-like replacement if a second-hand 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.

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 check the details of an insurance policy carefully before jumping to any conclusions, Which? said.

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.”

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

The savings accounts paying the most interest

It’s time to get your finances in shape, and moving your cash savings to a higher paying deal is a good plac...

Everything you need to know about being furloughed

Few people had heard of ‘furlough’ before March 2020, but the coronavirus pandemic thrust the idea of bein...

The experts’ guide to sorting out your personal finances in 2021

From opting to ‘low spend’ months to imposing your own ‘cooling-off period’, industry experts reveal t...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week