Misrepresentation, Non-Disclosure and Breach ... - Law Commission

Section 4 Baseline analysis of insurance markets and the extent of non-disclosure
The data contained in this survey does not provide universal coverage of all
the insurance products in the consumer market place. For example, there is
no explicit information relating to critical illness policies, which we believe
has a higher than average incidence of non-payment for reasons of nondisclosure.
However, we have supplemented the information from the
Expenditure and Food Survey with various pieces of information collected
from the Association of British Insurers (ABI), previous research undertaken
relating to the regulation of insurance markets and publicly available
information collected directly from insurers operating in the retail market.
Table 6: Weekly household expenditure on insurance products and
household coverage
Average weekly
expenditure
2005/2006
(all households)
Recording
Sample
Household
Coverage
Average weekly
expenditure
2005/2006
(households
covered)
Buildings Insurance £2.43 4,280 63.1% £3.85
Contents Insurance £2.40 5,101 75.2% £3.19
Household Appliances £0.10 85 1.3% £7.98
Medical Insurance £1.60 808 11.9% £13.44
Vehicle Insurance £7.40 4,876 71.9% £10.30
Mortgage Protection £1.70 1,381 20.4% £8.35
Life Assurance £5.80 2,674 39.4% £14.70
‘Other’ Insurance £1.20 1,660 24.5% £4.90
Total £22.83 6,785 100.0%
Source 2005/2006 Expenditure and Food Survey, Office for National Statistics
The information presented in Column 5 of Table 6 indicates that the average
household insurance expenditure (across all households purchasing that form
of insurance) range is between £14.70 for life assurance to approximately
£3.19 per week in respect of insurance relating to contents insurance.
Column 4 presents some information on the proportion of households that
obtain the various types of insurance and again there is a significant variation
in coverage depending on the insurance product.
At the higher end of the scale, almost 75% of households purchase contents
insurance. 72% of households purchase vehicle insurance and 63%
buildings/structural insurance, while just over 11% purchase private medical
insurance and less than 2% purchase insurance for household appliances.
London Economics
June 2007 17