Car insurance providers are consistently offering poor value for money to drivers, a consumer champion finds.
Policies parked in the cheaper space of insurance deals are leaving car owners without cover for many typical claims.
A total of 70% of insurers managed to score two stars out of five on Which?’s customer survey analysis. The study analysed drivers’ overall experience and examined various aspects of the cover.
Lloyds Bank performed the worst out of the 27 providers overall, scoring 59%. When it came to value for money, at the bottom of the pile were Admiral, Sainsbury’s Bank, 1st Central, Esure, and Hastings Direct, which all recorded 60% from drivers.
A total of 60 policies from 28 insurers were investigated, including seven ‘essential’ policies. Those will usually be the cheaper options and will provide basic cover, but may not have elements like driving other cars or replacement vehicles included.
Essential products often miss out key policy elements
The highest rated out of the ‘essential’ products was Sainsbury’s Bank with 60%. However, the lowest-ranked provider for ‘essential’ products was Hastings, which attained a 44% score, while policy providers scored 64% on average.
Hastings’ essential cover joined Quote Me Happy, Sainsbury’s Bank, and Tesco Bank in removing cover for glass damage, which proved to be inconvenient for many motorists. This is due to issues involving glass being the second-most common kind of claim – windscreen claims accounted for a fifth of all claims made by the consumer champion’s 2,793 respondents.
Without that aspect included in a policy, motorists could end up forking out extortionate amounts for repairs.
On the other end of the scale was NFU Mutual, which scored a customer score of 81% and won Which? Recommended Provider (WRP) status. The leading insurer boasted the highest score when it comes to value for money (4/5) and ability to deal with queries (5/5).
NFU Mutual and LV given ‘recommended’ status
The second-best policy provider was Axa, but due to scoring a poor policy score of 57%, it didn’t achieve WRP status.
LV also bagged the status, but scored a much – comparably – lower score of 70%. The provider had consistently good cover and a lifetime guarantee for repair jobs.
The WRP status is awarded for achieving at least average levels of cover in ‘standard’ policies and scoring at least 70% on customer satisfaction. It also considers whether drivers would recommend the policy to a friend or family member.
Meanwhile, the average price for drivers is now an average of £1,000 per year, which is doubled for drivers under the age of 24 years old. For drivers in that age bracket, premiums have risen by £655 in a year.
Other issues for picking a policy come with the way providers charge motorists. A surcharge of over £300 hits drivers if they choose to pay for their cover monthly as opposed to upfront, a separate study from GoCompare’s data found.
The raw deal of many car insurance policies has led to calls to the Financial Conduct Authority (FCA) to improve the clarity of its offers.
Car insurance premiums at ‘eye-watering’ levels
Rocio Concha, Which? director of policy and advocacy, said: “You can’t be on the road legally unless you have car insurance, but with premiums at eye-watering levels, many motorists are being pushed towards stripped-back policies.
“Concerningly, our research shows that some basic policies lack cover for common claims, meaning that a cracked windscreen could leave some drivers facing hefty repair bills they’d assumed the insurance would cover.”
Concha added: “Value for money remains a key consideration for motorists shopping around for insurance, and the FCA must ensure that firms that sell policies with major exclusions are clear about these to their customers.”
