Homeowners and drivers are so peeved about prices and jumping through hoops to make a claim that they just go for the cheapest insurance cover available.
Few bother to search for the best insurance to suit their needs, according to a study by price collective group Incahoot.
This leaves a massive three out four people opting for insurance cover on price alone.
Even worse, 14% of insurance customers do not bother claiming off a policy because the process is too much bother, while 22% swallow the cost because excesses on their policies are too high to make a claim worthwhile.
Many insurance policy holders have excesses adding up to £200 or more of the first claim, which is often around the same cost as repairing or replacing the loss or damage, making completing the paperwork pointless.
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Insurance prices soared by around 40% for drivers and 15% for homeowners last year, said a study from the AA.
While research from specialist insurer Hiscox revealed most homeowners underestimate the value of their possessions by around 66%.
John Evans, from Incahoot, said: “Price is important, but with insurance as most things, it’s rarely the whole story. Merely comparing prices could be a short cut you’ll regret.
“Britain’s obsession with low price insurance has gone too far. We found only 7.4% of us choose insurance based on a personal recommendation, with just 4% taking tips from a broker.”
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That means a customer never knows whether they have the best or most cost-effective cover without spending time on several web sites or making phone calls as well.
This is good for the insurers – Direct Line want you to believe their policies are cheaper so you get a quote even though they may rank as more expensive – but not so good for comparison sites because customers can never trust the results as the definitive quote for their cover.