To protect their no-claims bonuses British motorists are paying £336 million a year to have their cars repaired.
Egg discovered that one in four, or 7.2 million, drivers do not have a protected no-claims bonus, and that the cost over the last five years 1.15 million people have seen their car insurance premiums jump by 20 per cent or more following an accident.
Andy Deller, director of banking and insurance at Egg, noted: "Some motorists look to reduce the overall cost of their car insurance by not protecting their no-claims discounts.
"This is often a false economy and can be risky as some one million people will end up paying for repairs to their cars rather than claim on their insurance and lose their discounts over the next 12 months.
"Motorists looking to reduce their car insurance premiums should not cut the quality of their cover or lose their no claims discounts, but instead shop around to ensure they have competitive quotes.
"We estimate that motorists are currently paying £3.6 billion a year too much for their car insurance. This equates to about £120 per motorist." To compare car insurance deals online, click here.
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