One in five (21%) people are clueless about how big their insurance bills could be in the event of a claim, said Go.Compare.

The comparison site said that many don’t understand what they may have to pay if they make a claim, because they don’t know the ‘excess’ on their insurance policy.

What is an excess?

Insurance policies often contain a compulsory excess as standard – which stipulates the amount you have to pay from your own pocket if you file a claim with your insurance provider – yet the research shows that many are in the dark about their policy limits.

You can also choose a voluntary excess to reduce your premiums.

Younger generations seem to be more experienced at researching excesses. Only 9% of 18 to 24-year-olds with a contents home policy didn’t know their compulsory and voluntary excesses.

However, older generations were not as knowledgable, as a quarter of 45 to 54-year-olds with contents cover admitted to being clueless about their excesses.

Ceri McMillan, Go.Compare’s home insurance spokesperson, said: “Knowing your voluntary and compulsory excesses is vital, so that you are prepared for any potential costs if you have to make a claim. When it comes to choosing a contents home insurance policy, you should always look closely at the excesses and any other potential fees, and factor these in as you decide if the policy is right for you.

“Choosing lower excesses will mean you have less to pay in the event of a claim, but it will likely increase the cost of your home insurance premium. We always recommend that customers use an online comparison tool, as this is the quickest way to compare options and find the right cover.”