Beware of these exclusions in cheap 'essentials' car insurance, drivers warned

'Essentials' car insurance offers less cover than standard comprehensive dealsThe big draw of essentials policies is that they offer a cheaper alternativeBut experts warn drivers may be unaware these deals provide less protection 

Drivers are urged to be aware that cheaper 'essentials' car insurance policies may not give them the protection they expect.

Experts at campaign group Fairer Finance say that many insurers are 'rapidly introducing' cut-price car insurance lines, often branded as 'essentials' or similar.

But these cheaper policies often leave out cover that drivers might expect, such as windscreen cover and payouts for stolen keys - which becomes an issue if drivers are unaware.

Cheaper car insurance is particularly attractive because of rapid price hikes that mean the average driver now pays a record £635 a year for cover.

Key point: Many 'essentials' car insurance deals do not pay out for missing or stolen keys

But Fairer Finance is now calling on insurers for full transparency on what these stripped-back essentials policies do and do not cover.

Among the largest 10 car insurers, 60 per cent now offer 'essentials' policies.

These policies can leave out many features found in standard car insurance policies.

Common exclusions in 'essentials' policies include windscreen cover, stolen key replacement and courtesy cars.

Many also leave out the 'uninsured driver promise', a guarantee to reinstate no-claims discounts and reimburse excess if involved in an accident with an uninsured driver.

For example, Admiral's Essential policy does not include cover for driving abroad, personal possessions in the car, stereo insurance or windscreen cover, all of which are included with Admiral's next-highest insurance deal.

An example motorist insuring a Peugeot 207 would pay £475.09 a year for Admiral Essential cover, and £500.09 for standard Admiral car insurance.

Likewise, a Churchill Essentials policy costing £513.11 a year does not include cover for driving abroad, lost keys, personal possessions or a protected no claims discount. But a standard Churchill policy, costing £568.09, does include all these things.

Admiral, Ageas, and Hastings have offered essentials policies for some time, but 2023 saw Churchill, Sainsbury's, Boom, Moija and Geoffrey Insurance launching them.

Fairer Finance managing director James Daley said: 'Since many customers will opt for essentials cover due to the lower price, it is vital for insurers and comparison sites to be clear about the exclusions and limitations of these policies. People need to understand these restrictions at the time of purchase rather than at the time of making a claim.

'Many insurance brands that once had a single comprehensive car insurance policy, now can have three or four different sub-brands all offering different tiers of cover.

'This brand stacking is designed to ensure they can keep their name at the top of the price comparison charts – but it makes choosing the right policy all the more difficult for consumers.'

Fairer Finance's Daley questioned whether there should be a minimum standard for comprehensive motor insurance.

He added: 'By offering low coverage limits, insurers can reduce their payouts per claim while maintaining the 'comprehensive' label on their policies.'