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Motor insurance is too complex to understand

2nd June 2016

Half of motorists in the UK believe that motor insurance is too complex to understand

  • 48% of motorists find motor insurance confusing
  • Over half (51%) don’t understand how motor insurance is calculated
  • Motor insurance is a grudge purchase for over two fifths (43%) of the UK’s drivers
  • Co-op continues to drive transparency in the insurance industry
  • Today Co-op releases a video to explain where driver’s money goes

Half of the UK’s drivers believe that motor insurance is too confusing, with the overwhelming majority (86%)* believing that it needs to be easier to understand.

Research from Co-op Insurance has found that over half (51%) don’t understand how their premium is calculated, two fifths are unclear why their premium price may fluctuate year to year and over a third (36%) don’t understand their policy price, in relation to their vehicle.Car Insurance. Where does my money go

Research has also revealed that many people aren’t aware of some of the fundamental things that their premium is for. For example, 42% of drivers don’t realise it is in case another driver claims for personal injury, as a result of an accident that is their fault.

For two fifths of drivers, motor insurance is a grudge purchase, with over a tenth (15%) of drivers saying that they would not buy motor insurance if it wasn’t a legal requirement.

In response to this, Co-op Insurance is today (2 June) launching the first, in a series of three, animated videos which has been designed to explain how insurance pricing works, to improve transparency for its customers.

Co-op Insurance is committed to improving transparency for its customers and members  and this is the second part of a series of activity it has undertaken to do this, and  make insurance easier to understand. Earlier this year it launched an online tool which was sent to over 10,000 home insurance customers, which was positively received, and fully explained how home insurance premiums are calculated.

The video aims to answer why premium prices cost what they do, in relation to the value of a vehicle. It explains what percentage of a motor insurance premium goes towards costs if a driver injured others, with a quarter** going towards this. It also explains how about a fifth of the policy premium price goes towards repairing damage to other people’s property. A fifth also goes towards a policyholders own car for things such as, theft of the vehicle or repairs to fix damage to a policyholder’s own car in case of damage. It also outlines business costs and Insurance Premium Tax.

James Hillon, Products and Pricing Director at Co-op Insurance, said: “Motor insurance can be complex and the research has found that drivers are often confused by it. The new video, which is the first in a series, aims to answer the age old question drivers have about the cost of their premium, in relation to the value of their vehicle.

“At Co-op we want to keep communities safe and we hope that by explaining insurance it will help drivers to understand the value they get and reduce the chances of them deciding to go without insurance. Uninsured drivers have an impact on the cost of insurance generally, and can also lead to really unfair situations on honest road users if they are involved in an incident.

“At Co-op Insurance we are committed to doing the right thing for our customers. This is the second step, following a home insurance initiative earlier this year, in our journey to improve transparency and make insurance easier to understand.”



The video will be available on The Hub and will be promoted on social media.

What confuses UK drivers about insurance



% of drivers confused


How premium is calculated



Why prices can change annually



What isn’t covered



The policy price in relation to vehicle value



What different add ons are i.e. legal cover



What is covered



Why it isn’t easy to compare policies easily



Insurance Premium Tax



When I need to update my insurer on changes




Notes to editors

As part of the transformation of Co-op Insurance, colleagues were challenged to present original ideas to the insurer’s Executive team that would ultimately benefit customers and support the business in becoming a more innovative insurer.

The idea for the video was created by colleagues from the business’ actuarial and technical services team.

*Research carried out by Atomik Research on behalf of the Co-op Insurance in May 2016 questioning 2,000 UK drivers

** All figures are correct as of March 2016 and are based on Co-op Ecoinsurance which is our most popular motor product.

For further information please contact

Jenna Moss
Press & Media Relations Manager – Co-op Group
Tel: 0161 767 4354 / 07770 441828

About Co-op Insurance

Co-op Insurance is a UK-based general insurer that operates principally within the personal lines segments of the motor and home insurance markets. Co-op Insurance underwrites the majority of business written, supplemented with some small lines of business where Co-op Insurance acts as a distributor or has a 100% reinsurance arrangement in place.

With more than 1.18m customers, Co-op Insurance is committed to ‘Doing the Right Thing’ and always strives to treat customers and members fairly. Co-op Insurance pioneered the way in lowering the insurance premiums of young drivers as the first major insurer to launch a pay how you drive telematics insurance product for young drivers in 2011. Since launching the scheme, Co-op Insurance has saved its young drivers more than £7.2 million in their first year of driving.