Car insurance loopholes are leaving UK drivers with eye-watering bills, a new study has revealed.

The consumer rights website Which? found significant gaps in cover for personal belongings, as well as toothless legal expenses cover and surprising exclusions for courtesy cars.

The study looked into 49 car insurance policies from 34 insurers, finding that a number of issues encountered by drivers are not covered by the vast majority of policies.

Shockingly, just two of them protected cash and documents and only three covered credit cards.

Moreover, four in 10 policies with personal possessions cover excluded mobile phones.

Jenny Ross, money editor at Which? said: “Our research shows that motorists risk facing hefty bills when things go wrong as a large number of policies don’t cover incidents or possessions you might expect.

"With the cost of living biting, this means car problems could be disastrous for those on low incomes, or with limited savings.

“We would urge drivers to read the small print – if you’re comparing two similarly priced policies, the bills you can rack up by falling foul of car insurance loopholes could dwarf the extra amount you would pay for the more expensive cover."

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Police reported 48,400 vehicles as being stolen in 2021, according to data from the Driver and Vehicle Licensing Agency (DVLA), an increase of 3% from the year before.

Almost all car insurance policies contain some personal belongings cover which helps you repair or replace loose items damaged in or stolen from your vehicle.

However, the new findings suggest that current policies are inadequate in helping drivers avoid hefty bills.

Which? also found that while legal expenses cover can provide invaluable access to legal advice, it can be ineffective in certain scenarios.

Only a quarter (24%) of the policies looked at paid for users to recover illegal clamping or towing fees, while just three in 10 (31%) would help with legal costs related to a car’s licence plate being cloned.

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In addition, while nearly all policies have provision for courtesy car cover as standard, only a fifth offer a temporary replacement vehicle if the original is stolen, and just a fifth - again - do so if it is written off.

Which? notes that though many policies do have options to upgrade this feature to make it more comprehensive, drivers should not consider full cover a given.

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The rarest feature offered by insurers was guaranteed cover for driving other cars, a cover which can be useful if you needed to quickly borrow a friend’s car.

However, drivers under 25 are generally excluded from this policy and in over a third (37%) of policies, it only applies in emergencies.

Seven in 10 (69%) policies offered help in the event of accidentally filling a petrol tank with diesel (or vice versa), but less than one in five (18%) will assist with both draining the tank and repairing the engine.

Half of policies do one or the other.

Ross recommends switching insurers if you find that your contract contains such loopholes.

To find the best providers for delivering quality of service and cover, the consumer champion surveyed more than 1,800 policyholders who have made a car insurance claim in the past two years – asking them how satisfied they were and how likely they would be to recommend their provider.

Of the 13 firms receiving both a ‘customer score’ and a ‘policy score’, the insurer NFU Mutual topped the table with customers praising its ability to deal with queries and value for money.

NFU mutual also achieved a top rating in 47 of the 73 policy elements Which? examined, including guarantees of repairs and a guaranteed courtesy car.

Overall, it scored 86% on average for customer and policy scores.

Other top scorers included LV (78%), Saga (78%) and Direct Line (76%).

Meanwhile, Admiral and Hastings Direct achieved the lowest total scores, with 63% and 65% respectively.

Ross added: “Anyone who’s unhappy with how their insurer has handled a claim should always shop around when it’s time to renew. You could save hundreds of pounds by switching insurers, while getting the right cover to suit your needs.”

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