Some ‘budget-friendly’ motor policies lack cover for common claims – Which?

The consumer group found that some stripped-back insurance policies did not have cover for glass damage.

Higher premiums were forcing many motorists to consider more wallet-friendly policies, the consumer group said
Vehicles on a motorway Higher premiums were forcing many motorists to consider more wallet-friendly policies, the consumer group said (Ben Birchall/PA)

Some “budget-friendly” insurance policies would not leave motorists covered for common claims such as a cracked windscreen, Which? is warning.

Higher premiums will have forced many motorists to consider more wallet-friendly policies, often offered by firms in a bid to make their range of deals more competitive, the consumer group said.

Lower prices on more budget-friendly basic policies may place them higher up on comparison websites than more expensive comprehensive policies – but Which? is warning motorists to check the small print of policies after finding gaps which could leave motorists “high and dry” should they need to make a claim.

It looked at the cover in more than 60 policies offered by 28 insurers, including some basic products.

Which? found that some stripped-back policies did not have cover for glass damage, which the consumer group’s research indicated was a common claim drivers made. This could leave motorists at risk of facing a hefty bill for repairs, Which? said.

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.”

The average price paid for motor insurance in the final quarter of 2023 was around a third, or £157 in cash terms, higher compared with a year earlier, according to figures from the Association of British Insurers (ABI).

Between October 1 and December 31 2023, the average price paid for private motor cover was £627, up from £470 during the same period a year earlier.

Last week, the ABI said it was exploring various ways to tackle the rising cost of motor cover.

This included the industry doing more on transparency around which vehicles were more costly to insure, to help people make more informed choices, and continuing to crack down on fraud.

Longer repair times, higher repair costs, and the rising price of replacement vehicles had been adding to the cost of premiums, according to insurers.

The ABI also highlighted insurance premium tax (IPT) as a source of costs, saying it added £67 to the average policy. IPT is a tax on insurers which feeds into the costs customers pay.

An ABI spokesperson said: “Our members fully understand the importance of providing fair value to customers and work hard to deliver it. Our data shows that 97% of private motor insurance claims are accepted, and the average claim is over £4,000.

“Motor insurance is a legal requirement and each driver’s circumstances will be different, so by offering a range of products, insurers are meeting customer demands and helping them stay on the road.

“Understanding what your policy includes and any excesses involved is vital and our members are committed to ensuring information is presented in a way that is as straightforward as possible.

“When looking for motor insurance, we would always recommend shopping around to find the policy that best suits your needs.”