Motor insurers are making changes to their cover to take in recent developments such as third party liability and terrorism. Analyst Defaqto compares products from leading personal lines providers across most distribution channels

Defaqto found that May, June and July were busy periods of change in the personal insurance marketplace. In particular providers seem to have been feverishly fine tuning their private motor offerings.

They now reflect customers' increasing tendency to want foreign use cover, the more sophisticated in-car electronic equipment available and the effect the reinsurers are having on the market.

We have looked at a sample of the products that have recently changed, comparing products across most distribution channels.

To examine how any changes have impacted on the policies overall position in relation to some of the best products in the market an analysis has been carried out over a wide range of products on the Aequos database.

Finally the providers who excel in their motor product have been examined over their home insurance products.

Private motor insurance
Product changes over the last few months have been dominated by the restriction in the third party property liability limit down to, on average, £20m - almost certainly a repercussion of reinsurers' reaction to the Selby rail crash.

Another feature of recent changes is that of foreign use. The motoring public has seized the opportunity to venture across the channel on to foreign roads, encouraged by the savings that can be had on their favourite indulgences.

Finally the development of more and more sophisticated in-car electronic equipment has fuelled the need for insurers to react by clarifying their policies' definition of in-car audio equipment.

All the companies examined reduced their third party liability limit down to £20m. In addition, they made the following changes:

  • AXA Direct has clarified its definition of audio equipment to include navigational equipment, car phones, CD players and games consoles. Also it has added a clause stating non-manufacturer parts can be used to repair the insured's vehicle.
  • Churchill now provides foreign use as standard for up to 90 days per trip, the audio definition has been extended and medical expenses increased to £200.
  • Legal and General now provides replacement lock cover to £500, a claims commitment statement and examples of how insureds can meet their duty of care.
  • Lloyds TSB has changed its definition of audio equipment and amended new car cover to apply only if the insured is the "first and only registered keeper and legal owner" rather than just first legal owner.

  • Lombard Direct has expanded its terrorism exclusion and has limited any PA claim to pay only once if the insured is covered by another Lombard policy.
  • MMA now provides an no claims discount scale that runs to seven years and 67% and a standard 45 days of foreign use.

  • Zurich has increased its personal accident benefit to £10,000, now provides overnight hotel accommodation and has clarified its wording on EU breakdown cover.
  • Wider comparison
    Motor insurance across all distribution channels was analysed to determine if any of the newly-amended policies would feature among the better products in the wider market.

    Coming out top on the criteria chosen are the Saga and NFU Mutual motor products. The changes made to the Zurich Car Solutions product have cemented their position among the better products available.

    Home policies from motor providers
    For a provider to confidently cross-sell their personal lines products and maintain the perception of quality it is important to offer competitive home and motor policies.

    For those providers highlighted in the above motor market comparison, we analysed their home insurance offerings.

    Top of the crop comes Liverpool Victoria followed closely by the Saga product.

    Liverpool Victoria key features:

  • No single item limit
  • Contents in outbuildings and in the open covered to £1,000
  • Plants in garden covered up to £1,000
  • Drawbacks

  • Temporary removal limited to £500
  • £500 limit for replacement of locks and keys

  • These charts use Defaqto's unique Data Numerical Analysis (DNA) scoring system
  • DNA illustrates the relative positioning of a product based on selected criteria
  • The criteria used in these charts are a representative sample only and may not be relevant in all cases
  • Other criteria are available and may give different results
  • When used to match products to a client's circumstances, DNA can show how closely a product matches those requirements
  • Source: Defaqto
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