Consumers will also be verbally informed of their legal entitlements when making a claim

The Competition and Markets Authority (CMA), formerly the Competition Commission, has called on insurers to better inform policyholders of their legal rights in the event of an accident.

The CMA investigation found consumers had a “poor understanding of legal entitlements following an accident” and, under the new proposals released today, insurers must set out rights at the time of policy inception and first notification of loss.

A standardised statement of consumer rights to be included in policy documentation has been proposed by the CMA, as well as a verbal statement to be read out in the event of a claim.

The report acknowledged that any written statement is “likely to be filed unread along with the policy documentation” but wanted to include the information as a “point of reference” for consumers in the event of a claim.

The CMA has, however, withdrawn plans for insurance rights to be included in the driving theory test.