Car insurance holders 'should be given more information by providers'

Defaqto has stated that car insurance customers should be told more clearly how much they are being charged.

Car insurance customers must be informed more clearly by companies providing their cover about the exact amount they are being charged in their direct debit fees. 

That is according to new research conducted by the independent analysis company Defaqto, which has recently completed its annual study on the state of the country's motor insurance and breakdown car cover sector.

The study found that many customers opt to pay for their insurance cover by monthly instalments, especially if premiums attached to a package are high.

It was also discovered that the average fee charged by providers in 2010 is somewhere in between eight and 11 per cent of the gross premium, but the fee charged by providers was not specified for eight per cent of the total policies in the market.

Mike Powell of Defaqto remarked that this lack of clarity "should be a concern for the industry".

Meanwhile, anyone with Direct Line car insurance might be interested to note that their provider recently completed a study where it was found that millions of drivers are potentially risking their policies and health by being tired at the wheel.

By Nate Sawyer