A report by Aviva raises awkward questions about customers’ understanding of the jargon used in insurance documents.
Widespread confusion over financial terms means millions of people may be taking out important policies or products without completely understanding what cover the product offers. The findings show two in five (41%) UK adults – equivalent to 21m people – have ignored information given to them by financial providers, such as pension or bank statements, because they don’t understand the terms used in them.
Of those, almost one in five (17%) say they have missed an important change to their policy while 13% – 2.7m people – say they have actually lost money because they have ignored important communications.
The report highlights two other interesting facts:
- 43% of UK adults know the capital of Peru while 26% can explain football’s offside rule – yet less than a quarter (22%) say they know what a defined contribution pension is
- A third (30%) of homeowners think home insurance covers ‘anything that happens in their home’
Failing to understand costs money
Far too many people have lost out on refunds when cancelling holidays because they failed to read or understand the technical jargon in the policy before paying for it. Others have little understanding of the difference between third party and fully comprehensive motor cover and many have faced prosecution for driving without insurance, believing that their own policy covered them to drive a friend’s car.
One advantage of using an insurance broker to source cover, rather than buying an on-line policy, is that the broker will be happy to spend time translating the financial jargon into plain English, ensuring that you understand precisely what you are buying, whether it be motor, home or travel insurance.
If you have any questions about financial jargon used in insurance documents why not give Asprey Harris a call and ask for their help.
That’s another advantage of using an insurance broker – they will also be able to find you a good quote.