Many Britons have no idea to what extent their insurance policies cover them against unforeseen circumstances, according to the Motley Fool.

Newly-published statistics reveal that despite spending an average of 1,500 pounds on insurance cover on an annual basis, more than one in three people (39 per cent) admit that they are unsure exactly what their policy covers them for. The typical Briton takes out or renews six separate policies over the course of the year, the financial advice site reports. Around one in 25 people were found to possess a dozen or more insurance policies, while six per cent of respondents admitted to trying to insure everything they could. However, even this group’s eagerness was stretched to breaking point by the notion of twins insurance, which pays out in the event of a mother birth giving birth to multiple children.

While some people were found to be keen on getting cover for all manner of items, one in four suggested that they try to self-insure wherever possible by putting money aside to cover costs of eventualities such as theft or damage to personal items or repairs to property.

For those who have been caught short by their insurance policy or those who have not taken out cover and have found themselves facing expensive repair costs, taking out a low-rate personal loan may be advisable. By taking out this type of loan, people may find that they are able to meet the costs of replacement or repair quickly and effectively.

The Motley Fool study found that home insurance policies proved most popular among UK consumers, with 89 per cent of people taking out cover. Motor insurance and buildings insurance - both of which are legal requirements for car and homeowners respectively - were taken out by 85 per cent of respondents. Results were tabulated from a survey 1,457 readers in mid-May.

Pet insurance proved less popular, although more people were found to take out cover for their animal than their mobile phone or laptop. Other trends identified by the group included the assertion nine per cent of people had taken out an insurance policy to cover their drains, while 18 per cent had secured cover for their boiler.

Advising, David Kuo, head of personal finance at Fool, says: “The key to buying insurance is only to insure against risk that you cannot afford to bear. So, if you buy insurance you don’t need then you are wasting money. But if you don’t buy insurance that you do need, then eventually your decision will come back to haunt you. Not knowing how much insurance cover you have is just as bad. It’s tantamount to playing a card game where everyone can see your cards except you.”

For those who have failed to take out cover and have paid the price as a result, a low-rate personal loan may provide the financial assistance to carry out essential repairs or meet the cost of replacing items.

The Motley Fool study follows recent advice from Chelsea Building Society urging people to make sure that the contents of their property are secure before going on holiday to reduce the risk of making a home insurance claim as a result of theft.

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