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False Economy: The Real Cost Of Not Shopping Around For Car Insurance

28 November 2011

New research(1) from Sainsbury’s car insurance suggests that motorists collectively fork out over £73 million a year over and above their car insurance premiums because they find themselves underinsured. These car owners are sacrificing vital levels of cover because they don’t shop around for good quality cover as well as competitive premiums.  The research reveals that motorists are instead only looking for the cheapest available premium when purchasing car insurance.

In the last five years drivers have been forced to pay out over £368 million because their car insurance policies did not cover them for a range of common claims. The findings reveal that over this period 2.4 million drivers (7% of all those with a car insurance policy) have had to foot the bill for replacement car keys and child car seats, transport to get to their destination after an accident or courtesy cars after an accident – all because their car insurance policies didn’t provide the necessary cover.

The research reveals that over the past five years over a million people have had to pay an average of £170.67 each or collectively £172.4 million for a courtesy car so that, after an accident, they could continue with their every day lives without disruption. Sainsbury’s car insurance research(3) reveals that 61% of standard(3) car insurance products don’t offer a courtesy car as standard.

A disgruntled 820,000 people have had to pay for alternative transport to their destination following an accident in their car, paying an average of £123 each, totalling £101 million(1), perhaps unsurprising given that 60% of standard car insurance products available don’t provide accident transport cover(3).

Over 660,000 motorists forked out a collective £65.8 million, on average £99.33 each, for lost or stolen car keys because their policy didn’t provide cover for this eventuality (1).

Cover for replacing child car seats is missing from three quarters of car insurance policies (74%)(3), resulting in over 230,000 drivers being forced to pay out £29 million, or £123.94 each on average, for replacing these safety aids after being involved in a car accident(1).

Ben Tyte, Head of Sainsbury’s car insurance, said: “When choosing a car insurance provider it is vital motorists compare policies on a like-for-like basis; looking at price alone could have disastrous consequences. Of course, getting the most competitive price is important and we’d always urge motorists to shop around, but they need to make sure that this doesn’t result in a false economy.

“Those who don’t compare quality of cover and instead opt for the cheapest policy may find that they don’t have many benefits on their cover. Worse still, they might only discover they’re not covered at the time of having a bump or losing their keys for example; it could make for a stressful and costly experience that could have been avoided.”

Product feature Percentage of policies that DON’T offer this feature(3)
Provides full replacement cover for child car seat claims 74%
Guarantees a courtesy car as standard 61%
Provides accident transport cover 60%
Provides £1,000 or more cover for theft of keys 54%

Sainsbury’s car insurance offers two options of cover, a standard policy and a Premier Cover option. Both products offer some of the widest range of cover and benefits available in the marketplace.

Sainsbury’s Premier Cover Car Insurance also offers a range of enhanced benefits including a guaranteed like for like courtesy car(4) which means a family’s large seven-seater will be matched with another so that they can carry on as normal for the duration of repairs – only 1.9% of policies offer this(3). It also guarantees a courtesy car for 21 days or more following a total loss of your vehicle.

Sainsbury’s shoppers with a Nectar card, taking out Sainsbury’s Car Insurance online will benefit from up to 25% discount on their premium(5). The offer is available until Tuesday 8th November. Customers already receive up to 15% off just for having a Nectar card so this limited offer gives them up to an additional 10% off.

New Sainsbury’s car insurance customers also benefit from double Nectar points on all Sainsbury’s shopping in-store, online and in petrol filling stations for two years; the saving equates to the equivalent of 2% off their Sainsbury’s purchases when paying along with their Nectar card(5). For example, those spending £49 a week in-store at Sainsbury’s could, over a year, earn up to a week’s free shopping(6).

For further information on Sainsbury’s car insurance, call 0800 092 9459, visit www.sainsburysfinance.co.uk or pick up a leaflet in store.

-Ends-

For further information, please contact:

Ian Morris / Tom Wilson
Citigate Dewe Rogerson
020 7638 9571

Notes to editors:

(1) ICM interviewed a random sample of 2,004 adults aged 18+. The interviews were conducted via an online omnibus survey between 31st August – 1st September 2011.  Surveys were conducted across the country and the results have been weighted to the profile of all adults.  ICM is a member of the British Polling Council and abides by its rules. Further information available at www.icmresearch.co.uk

(2) At least 10% of Nectar customers will achieve the maximum of 25% discount. Discount is calculated based on your circumstances and loyalty information. Sainsbury’s customers will receive a discounted rate based on information related to transactions made in Sainsbury’s using your Nectar card. For more information see our Nectar page.

(3) Defaqto research (May 2011), commissioned by Sainsbury’s Finance.  Defaqto is an independent financial research company. Defaqto have included the term ‘standard car insurance products’ as within their research they excluded a small number (10) of high net worth policies which are niche specialist policies.

(4) Courtesy car offered as standard on both policies (fully comprehensive). Subject to availability on Sainsbury’s car insurance. Like for like guaranteed on Sainsbury’s Premier Cover Car Insurance

(5) Double Nectar points available to customers purchasing comprehensive cover. The policy must be renewed at first renewal for double Nectar points to continue. Seewww.sainsburysfinance.co.uk for full terms and conditions. Points are not available on a limited range of Sainsbury’s goods and services – see in-store or www.sainsburys.co.uk/nectar for details.

(6) Week’s free shopping earned by combining base points earned in-store/online and offer bonus points for 2 years when you collect double Nectar points with selected finance products. For example, £49 per weekly spend over a year earned 10,192 Nectar points = £50 approx to redeem in-store. Bonus Nectar points subject to a monthly maximum of 2,500 points per qualifying product type per month.

Sainsbury’s Finance:

To view our latest press releases and product information, please visit the Sainsbury’s Finance online media centre atwww.sainsburysfinance.co.uk/media.

Sainsbury’s was the first major British supermarket to open a bank, commencing trading in February 1997. Benefiting from a fantastic, trusted brand that enables us to combine the shopping experience with personal finance, Sainsbury’s Finance provides a range of quality products including insurances, credit cards, savings and loans. Our proposition is to make shopping more rewarding by offering customers great products at fair prices, while consistently rewarding shoppers for their loyalty and being easy to do business with at all times.  Our products consistently top Best Buy tables and regularly win awards for quality, price and service.

Sainsbury’s Finance recent awards include Best Overall Online Provider, Best Online Pet Insurance Provider, Best Online Personal Loan Provider and Best Direct Home Insurance Provider at the Your Money Awards 2011. It was also named Most Competitive Term Assurance Direct Provider at the Moneyfacts Awards 2011.

Sainsbury’s Finance is a joint venture between J.Sainsbury plc and Lloyds Banking Group.
For further information and general Sainsbury’s Finance enquiries customers can call the freephone number on 0500 40 50 60 or visit www.sainsburysfinance.co.uk

About RBS Insurance

RBS Insurance is the second largest general insurer in the UK1 and is wholly owned by The Royal Bank of Scotland Group. Headquartered in Bromley, Kent, it has operations in the UK, Germany and Italy.

It provides a wide range of general insurance products to consumers through a number of well known brands including; Direct Line, Churchill and Privilege. It also provides insurance services for third party brands, through its UKI Partnerships division.  In the commercial sector, its NIG and Direct Line for Business operations provide insurance products for businesses via brokers or direct respectively.
In addition to insurance services, RBS Insurance continues to provide support and reassurance to millions of UK motorists through its Green Flag breakdown recovery service and Tracker stolen vehicle recovery and telematics business.
1Based on policies in force 2010.

Notes to editors/webmasters

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<ahref=”http://www.sainsburyfinance.co.uk/insuring/ins_carinsurance_car_skip.shtml“> Sainsbury’s Car Insurance</a>