‘Insurers are hollowing out their policies so they look cheap’

price points. Even for a savvy consumer, directly comparing all of this information is a tall order.

Mr Daley said: “Companies aren’t explaining the value of these policies properly to people. At the point where customers are presented with add-ons, they want to finish the purchase as quickly as they can. Insurers tend to facilitate this, rather than slowing down the process and explaining the add-ons.

“Comparison websites should be helping people build packages that are relevant to them, then providing prices for comparable cover that includes everything.”

Although the extra cover can be essential, some add-ons that significantly increase the cost of a policy are rarely claimed on.

In 2017, less than 0.002pc of personal accident add-ons sold by Aviva, Britain’s biggest insurer, were claimed on, according to the Financial Conduct Authority (FCA), the City regulator. The average payout was around £50,000.

For LV= that figure is 0.004pc, with a £100,000 average payout. Mr Daley said: “The FCA data tells a story. In some cases, particularly with personal accident policies, the level of claims is negligible. Really, the cost of these types of insurance should be a few pence, but it tends to be a lot more than that.”

The intense price competition fostered by comparison websites had led some insurers to adopt low-cost airline-style pricing.

This involves underpricing their core insurance and offering an array of expensive add-ons when a customer gets close to completing the purchase in order to recoup that revenue. They can also try to push through big price rises when a customer comes to renew.

Telegraph Money heard from one customer earlier this year who was offered a price 80pc higher than the previous year when his home insurance policy was due to be automatically renewed.

“Insurers are hollowing out their core products to make them cheaper, removing key elements of cover,” Mr Daley said.

This can easily catch customers out. Many car insurance policies, for example, cover driving in the EU as well as Britain, and many drivers wouldn’t think twice about their insurance before getting on a ferry with their car.

But some policies cease to offer cover when the vehicle leaves the UK, which could leave drivers uninsured if they fail to read the fine print.

Heather Smith of LV= said: “The benefit of add-ons is that they give customers a choice and the opportunity to tailor the cover to meet their needs, which avoids a one-size-fits-all approach.”

An Aviva spokesman said personal accident add-ons were “designed to provide ‘peace of mind’ protection”. He added: “The ‘catastrophe’ nature of the cover means that actual claims incidents are generally extremely low.”