The UK’s biggest car insurer is claiming to be first to take a driver out of a driver-only policy because it found the coverage was not appropriate.
The firm, which has more than 100 million drivers covered through its Direct Auto Insurance product, said it has not found an issue with the policy since it was introduced last year.
“I have found the policy to be a good fit for drivers who are eligible to be covered through Direct Auto insurance, as long as they meet the minimum standards of insurance coverage,” said a spokesperson for the company, who did not wish to be named.
“We are proud of the quality of our coverage and are confident that drivers will find our policy to offer them the level of protection they expect,” the spokesperson added.
But critics say it is an example of the industry’s inability to protect drivers from the high cost of covering claims and the risk of being sued if a claim goes wrong.
“If you’ve got a policy that is on the books, there’s a guarantee it’s going to be paid,” said Nick O’Brien, the chair of consumer affairs at Consumer Action.
“You can’t just leave it up to a third party to pick up the bill, so I think that’s a very bad idea.”
“If I had an accident and my insurance covered me, I’d be a lot better off,” he added.
“It’s just not the case.”
Consumer groups have called for the insurance industry to change its policies to allow drivers to opt out of insurance, saying that many consumers have no idea the risk they are putting themselves at.
“The car insurance industry is a major driver of the UK’s health service, which is one of the reasons why people are signing up for insurance in the first place,” said the Campaign for Better Insurers.
“People should be able to opt-out of insurance if they are not satisfied with the quality and value of their policy.”
Consumer advocates have also criticised the UK car insurance market, which often offers low rates, low coverage and no risk-based pricing.
The company said it had taken out a policy from a previous driver to test the policy.
“When the policy was introduced we found it to be an appropriate fit for our drivers, who have been covered through our Direct Auto policy,” the company said.
“Although we did not find any issues with the vehicle insurance, we did make a number of adjustments to ensure it would be the right fit for us, including adding a third-party to cover the liability if the policy is terminated.”
Consumer Action is campaigning for a national policy review of car insurance in England and Wales.