Car insurance holders have shockingly revealed at least one in 10 are unaware if their car is even covered for business use despite the risks of breaking the rules. Research from Money Expert has shown nearly one in three would not know what to do with their car insurance if they were involved in an accident.
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Not understanding a policy can pose major road risks with motorists possibly unaware of what they can and can’t do on the roads.
Jason Smith, CEO of MoneyExpert.com said: “Obviously, it’s important to know exactly what your car insurance actually covers.
“If you only have third-party insurance, for example, you could be left with a nasty surprise after an accident leaves your car needing expensive repairs.
“But there are other bits of small print people don’t pay enough attention to – like whether the car is used for commuting or social purposes, or where it’s parked overnight.”
Breaking the terms of an agreement such as commuting with a car that is not covered could be considered negligence and may lead to a policy being invalidated.
This will mean companies will refuse to honour any claims which will push car repair payments onto the owner.
In extreme cases, invalidating your cover could see some motorists blacklisted from many traditional providers which could force owners to look for specialist agreements,
These are usually more expensive than cover offered from traditional providers which will see monthly premiums soar.
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Research from MoneyExpert has revealed More than one in 20 have even forgotten who their car insurance holder is.
Analysis revealed one in four simply let their partner deal with the policy and have no involvement in selecting an agreement which best suits their road use.
One in five are not aware how much their agreement costs them each year despite the heavy charges sometimes up to £1,000 per year.
The research found that under a quarter of road users are happy to let their policy renew automatically each year without shopping around for other providers.
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Shockingly 13 percent are unaware when their policy is up for renewal meaning owners have missed out on crucial savings.
One fifth of motorists said they expected their premiums to go down each year even if they don’t check their agreement.
Experts have previously pushed for road users to cancel their agreement and change providers before their contract is up for renewal.
Switching companies will ensure road users are given the best prices after firms usually raise costs for existing and loyal customers.
This is known as price walking and is when firms slowly raise premiums to bring a discounted rate they initially receive back in line with the true costs.
In another stunning claim one third of toad users said they had been involved in an accident where they didn’t make a claim to their insurers after their car was damaged.
The poll found 15 percent of road users revealed the reason for not informing their insurance provider was that it was not worth the paperwork.
A massive 38 percent said they were eager to protect their no claims bonus as a reason for not informing a provider.
However, failing to inform firms or accident damage could also lead to a policy being invalidated if a provider finds out.
This is because a slightly damaged car could increase your overall perceived risk of having an accident meaning your premium costs may rise.
Mr Smith said: “Insurance providers advise that you contact them any time you have an incident in your vehicle, even if you don’t plan to make a claim.
“It’s possible that this may increase your premiums slightly, but any underlying damage that you don’t report could invalidate your policy if it factors into a future claim.
“Our results found many people find dealing with insurance companies quite laborious – but that shouldn’t stop people from making sure all their paperwork is in order.”
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