'Useless' insurance planscondemned

21 hours ago

Consumers are wasting thousands of pounds on "useless and expensive" insurance, according to a consumer group.

Which? said that while some cover, such as buildings and contents, life and car insurance, was essential, others were often completely unnecessary, had high obstacles to claiming on them, and paid out in comparatively few cases.

It said despite the "peace of mind" these policies often claimed to offer, much of what they cover is either already protected by legislation or by existing insurance policies.

Policies have sprung up offering people cover against identity theft, but Which? said any proven identity fraud loses would be covered by people's banks.

It added that there were also policies offering cover for accidental death and injury, although these things may be covered under standard life insurance policies, while mobile phones could often be included under home contents insurance, without consumers needing to take out a separate policy. Extended warranties were also highlighted by the group as being poor value for money.

Payment protection insurance, which covers debt repayments if the holder is unable to work or loses their job, was also criticised.

The cover has been at the centre of controversy recently over claims that it is overpriced and being mis-sold to people who would never be able to claim on it.

Tony Levene, author of the new Which? Money Saving Handbook, said: "You can buy insurance to cover yourself against almost any conceivable risk - even alien abduction.

"The insurance industry's favourite phrase is 'peace of mind', but it uses this to justify policies that cost a lot and are almost impossible to claim against.

"Instead of just blindly following what the salesman says, people should carry out a risk assessment of their own and make an informed choice about whether they actually need the insurance, and whether it's worth the premium."