Consumers urged to read their policies

Article date: 2 April 2007

  • Norwich Union sheds light on why claims are rejected

Research by Norwich Union has revealed that a third (33%) of Brits don't read their insurance policies.

The insurer - who pays around £3 billion worth of claims each year - believes that if customers read their policies and understood what they are buying, they would be more certain that their insurance would provide suitable cover for their needs. At present 39% of Brits are unclear what's in their policy.

The "Your Policy Uncovered Report" produced by Norwich Union highlights the most common reasons why claims across home, motor and travel insurance might be declined by an insurer. Although some claims are simply not covered, many incidents could be insured against if customers understood what they need their insurance to cover, and then took out a policy that matches their needs.  

Darren Cornish, head of customer experience at Norwich Union, said: "Our research highlights a lack of understanding about insurance. Customers who don't know what they're covered for could face disappointment when claiming if their expectations are not met - something which could be avoided if they understood what is in their policy, before they need to claim. Although buying insurance may not be as exciting as buying a new handbag or a new gadget, consumers need to treat the purchase in the same way - researching what they are - and aren't - covered for, finding out what extras their policy provides, and making sure that the policy they buy is right for them."

Norwich Union's research also reveals that as many as 38% of people do not know when their policies expire. Remaining uninsured after cover runs out could have serious implications: driving without insurance is illegal, and having a mortgage without adequate buildings cover puts an undue financial burden on the homeowner in the event of a major incident.

Likewise, almost one in 10 (9%) do not know where their policy documents are kept in their home - a potential problem in the event of an emergency when they may need to know what telephone number to call. 

Most commonly rejected claims
The report highlights the top five most commonly rejected claims across home, motor and travel insurance explaining why they cannot be paid by insurers. In addition, it shows how, with a closer look at their policies, people can potentially reduce insurance premiums, ensure a speedier response to claims, and reap the benefits from additional cover.

For example, one of the most commonly rejected household claims is for items which are lost, something which is not covered by most standard household policies. Norwich Union advises customers to consider adding "personal belongings" - which covers personal contents in and out of the home - to a policy in order to cover themselves for this eventuality.  Furthermore, 74% of people are unaware that such personal belongings cover on home insurance will also protect them when they are on holiday, therefore doing away with the need for additional baggage cover with their travel insurance.

Some of the most common misperceptions about insurance cover include:

  • Keys left in car: 36% of motorists wrongly believe that if keys are left in the ignition and the car is stolen, they will be automatically covered
  • A fifth (22%) of homeowners mistakenly believe that if their home was completely destroyed, their buildings cover would pay the full market value of their home
  • Only one in 10 drivers know that adding a partner to their motor insurance policy will likely result in a decrease in their premiums.

Darren said: "We hope this report will lift the lid on some misconceptions about insurance and encourage more people to read their policies.    

"The insurance industry has a responsibility to be open and transparent about the workings of its policies, and we want to help cut through any confusion so people understand exactly what they are - and aren't - covered for. However customers have an equal responsibility to read the information we send them. We really encourage them to ask questions of their insurer if they are unclear on anything."

View the Your Policy Uncovered report (PDF 1,230K).

-ends-

For more information on the ‘Your Policy Uncovered' report, please contact:         

Anna Carter, Lexis PR, 020 7908 6431/07760 253 464, acarter@lexispr.com

Sophie Lam, Lexis PR, 020 7908 6482 / 07957 133010, slam@lexispr.com

Erik Nelson, Norwich Union Press Office, 01603 682 264/ 07989 427 086, erik.nelson@norwich-union.co.uk

Notes to Editors

  1. ICM interviewed a random sample of 1,000 adults aged 18+ on-line across the UK between 13-14 January 2007
  2. "Your Policy Uncovered" is the first report in a series of "Uncovered" reports from Norwich Union aiming to promote greater transparency between insurers and the insured by lifting the lid on how different policies are formulated and how premiums are calculated
  3. Most commonly rejected claims.

Home Claims

Motor Claims

Travel Claims

  • 1. Matching items
  • 2. Gradually operating cause
  • 3. Wear & tear
  • 4. Reasonable care
  • 5. Loss within the home
  • 1. Keys left in car
  • 2. Courtesy cars
  • 3. No claims bonus
  • 4. Fronting
  • 5. Vehicle maintenance
  • 1. Missed departure
  • 2. Reasonable care
  • 3. Medical conditions
  • 4. Flight cancellations
  • 5. Valuables

  

About Norwich Union
Norwich Union is the UK's largest general insurer with a market share of around 15%, with a focus on insurance for individuals and small businesses.

It is a leading provider of life, pensions and investment products and one of the largest financial adviser (FA) providers. FAs provide over 70% of the company's long-term savings business in the UK.

Norwich Union's news releases and a selection of images are available from Aviva's internet press centre at www.aviva.com/media.

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