A new YouGov survey shows customers across financial services markets, including mortgage lending, don't read important contract documents
About four in ten customers admit they don’t read the policy for their home and car insurance, according to a new report.
The survey of more than 1,000 adults, conducted by YouGov on behalf of insurance distribution firm Paymentshield, found 39% of people admitted to not reading their home insurance policy, with 52% admitting they ignored the details of their car insurance policy.
Paymentshield CEO Rob Evans believes insurance customers that don’t read their policies run the risk of having claims rejected, but it is the responsibility of the provider to help give consumers the right cover.
He said: “Too many people are not taking the time to read and understand critical financial documents – and we are in a position as an industry to help.
“As insurance providers and advisers, it is our job to deliver each individual customer with the right cover at the right price to ensure clients are not taking cover that they don’t need or being exposed to the impact and distress of being under-insured and having claims rejected.
“This is where having an adviser is a huge benefit to customers. The peace of mind from knowing that a trusted expert is gathering the right information, to get the right cover at the right price can’t be underestimated.”
Why don’t customers read policy documents?
The research found that of those people who didn’t read their home insurance policy, 46% said it was too time-consuming, 31% said it was too complicated and 25% said it was too boring.
Other survey responses prove the issue of not reading policies is not exclusive to insurance, but a general problem within financial services.
The most unread document found was credit card terms and conditions, at 58%, followed by car insurance policies in second, with home insurance policies coming third.
In the case of renters, 38% admitted to not reading their tenancy agreement, compared to 32% of homeowners who didn’t read their mortgage agreement.
Technology enables better advice
Mr Evans sees the application process for insurance customers as one area that can be improved by technology and data analytics, preventing insurers from having to rely on assumptions to price a policy.
“The increase in use of simply incorporating more assumptions into an application process, for example, can really impact on price or a claim and further increases the risk of a poor outcome for customers,” he added.
“So, we take a more holistic approach that looks at integration, technology and data sets to improve the process.
“With 50 IT people constantly working on delivering the best general insurance technology platform and more than 20 business development managers dedicated to helping advisers deliver the right outcomes for their clients.”