Many insurance policy add-ons are actually poor value, with very few claims made, according to figures from the Financial Conduct Authority (FCA).
Add-on insurance is when an insurer sells a policy alongside another product, but campaigners are claiming that the companies are taking advantage of the lack of expertise that customers have on the matter.
One of the complaints raised is over customers not having the opportunity to check price comparison sites to find out if the add-on they were paying for was good value or not.
In the FCA’s pilot report, it was found that there is a 20 to 25 per cent chance of you having a buildings and contents claim rejected if you are with Zenith or UIA. If you are with Royal and Sun Alliance or Hiscox, however, then your claim has a 97.5 to 100 per cent chance of being successful.
One notable finding was that payouts were very rare for those who had purchased personal accident cover alongside home or car insurance.
“We want stakeholders to have access to a wide range of information about the value of general insurance products that goes beyond price,” said Christopher Woolard, of the FCA.
“We expect the pilot publication to help incentivise firms to improve the value they offer consumers. The pilot will allow us to refine the value measures and obtain further evidence of the effectiveness of these measures ahead of any potential consultation.”
The FCA has published its data, after thousands of complaints, so you can check statistics on 38 insurance companies for the year ending 31 August 2016 if you want to. It shows the success rate of claims, their frequency, and what the average amount of money paid out for a successful claim was.
Further pilot data will be published by the FCA at a later date, for the year ending August 2017.