Drivers need a crash course in insurance

NEARLY half of the British public believe no-claims discount protection prevents insurers from putting up their premiums after having a car accident.

In fact, firms can charge more for policies even if a customer has paid to protect their discount.

The amount paid out by the insurer in a claim will determine whether the protected discount remains unaffected or the policy has to be changed.

This is one of many insurance myths, according to a survey carried out by consumer champion Which?

It found widespread confusion over policy terms, with most people struggling to pick fact from fiction.

Almost two-thirds of those polled thought that if they changed their mind and left an insurance contract within the 14-day “cooling-off” period they couldn’t be charged a fee. However, insurers are entitled to levy an administrative fee.

More than half thought a “fault” on a car insurance record meant insurers considered the policyholder to blame for an incident. But

HIT AND MYTHS: Motorists must know about policies

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

A third of those quizzed believed insurers have to pay for a “like-forlike” replacement if a car has been written off or stolen. However, firms will only compensate the estimated value of a vehicle just before the claim, which may not be enough for the same model.

More than 2,000 people were polled and Which? asked those who answered incorrectly about where they had obtained their information. More than half said “it was just something they’d always heard or thought”. One in seven said it came from friends and family.

Jenny Ross, Which? Money editor, said that when it comes to insurance, unpicking fact from fiction can be tricky.

She added: “It is important not to make assumptions or unquestioningly accept what others tell you. Instead, do your own research and check with your insurer if anything is unclear.”