Brits failing to read insurance policy small print

One of the most common pieces of advice given to consumers is to always read the small print before signing on the dotted line.

Such is the reputation of banks and insurance firms that most people pore over every detail of a contract or policy on the lookout for get-out clauses or potential added charges which could potentially see them out of pocket further down the line.

However, despite this growing sense of financial savoir faire, a good many Brits are still their own worst enemies and end up lining the pockets of borrowers and insurers and losing out themselves simply as they failed to take the trouble of doing even the slightest bit of research.

According to the latest figures released by Tescocompare.com, around one million UK adults have been unable to claim on a travel, home or car insurance policy within the last 12 months as they did not have the cover they believed they had.

Significantly, this lack of thoroughness ends up costing people an average of £736, though the study could not factor in a cost for the added inconvenience of not being covered, particularly in cases of travel insurance where a dream holiday could have been ruined for the sake of saving a bit of time or money before setting off.

Of those people questioned, 50 per cent of men and 56 per cent of women claimed that they made a point of reading the small print of a car insurance policy, a shockingly small proportion for something so serious.

What's more, just 37 per cent of people were found to regularly check the ingredients of food and drink products they consume, while this laziness was also commonplace when it comes to signing up for things such as broadband, mobile phones and satellite television.

Though it is all too easy to dismiss these figures as yet more evidence of the 'financial illiteracy' of UK adults, the study also highlighted that insurers are being true to their reputations and making it difficult for their customers to get their heads round the intricacies of their policies.

Of those people who had been unable to claim on an insurance policy in the last year, 61 per cent argued that they did in fact read the small print before signing up and were therefore genuinely surprised at their insurer's refusal to pay out.

As Tesco's Paul Baxter states: "Insurance polices can be complicated, and it is not surprising that so many people find themselves in a situation where they thought they were covered when in fact they weren't."

While there may be big savings to be had in the markets for all insurance products, short-term savings can lead to longer-term disappointment, therefore, as one million people would no doubt testify.