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Saturday, 3 February 2007

Home, car insurance "savings" claims mostly misleading






Recently the UK's financial regulator the Financial Services Authority announced results of a review into "savings claims" in home insurance, car insurance and travel insurance promotions in press advertising.

The FSA found that:
  • more than half (57%) of motor insurance savings claim promotions failed to provide any evidence as to how claimed savings would be achieved;
  • 25% of home insurance savings claim promotions failed to provide any evidence as to how claimed savings would be achieved.
Travel insurance saving claims were generally however of a higher standard than the others.

The FSA say that "Insurance advertisements can be misleading if they give the impression that most consumers are eligible for such savings when in fact only a few are. They can also be unclear if the basis of the savings claim is not clearly set out."

The FSA has contacted senior management of firms where it had concerns and required them to improve their promotions. The review will be repeated in three months. Firms which continue to make misleading claims will face regulatory action.

So, it behoves all us consumers to be wary of savings claims in insurance companies' advertising or promotions. By all means check them out, but I'd make sure I get details of exactly what savings I personally would get, and compare different companies' quotes - it's common sense really.

The FSA point out that consumer finance help, including on personal finance and matters such as insurance, can be found for free on the FSA's consumer finance website - and I'd certainly trust its neutrality and soundness a lot more than "advice" from some other sources, given the FSA's role as the UK financial regulator with, now, a brief covering consumer finances too.

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