Caravan Insurance

The majority of British drivers have little understanding of hybrid cars, with 41 per cent unaware that the term refers to a car that uses both petrol and electricity as a power source.

Consumers are paying higher insurance premiums because of new regulation in the industry, the Association of British Insurers (ABI) has said.

The group said that since the Financial Services Authority (FSA) took on regulating insurers in January of last year consumers have been inundated with regulatory information which they do not need.

An ABI report, entitled "The Regulation of General Insurance: One Year On", said that the regulated sales process was becoming so unbearable for individuals that they found it too long and were being deterred from looking around for the best deal.

Nevertheless shopping around for cheap home insurance is key to finding the best deal.

The comments came after the FSA announced a review into the regulation of the insurance industry.

"Many customers feel they are being bombarded with information they don't want. That deters them from searching out the best deal," said Stephen Haddrill, the ABI's director general, who added that he welcomed the FSA review.

"Customers need principles-based regulation to ensure a competitive market that delivers a fair deal."

New regulations, introduced last year, require brokers to inform customers, during a sales pitch, of how many products they sell and that they could complain about the product.