Oh no! Churchill ad appears somewhat misleading

Insurance to protect your home and its belongings is essential. It should be straightforward with the terms and any exclusions easy to follow. It’s more likely cover is required for a television than a Titian.

Step forward Churchill, one of two budget insurers (the other is Direct Line) run by The Royal Bank of Scotland. It was established in 1989 and home cover added the following year.

As RBS is 84 per cent owned by the taxpayer, this is almost a public insurer and ought to be doubly careful that its advertisements are clear. They are easily recognised by the nodding bulldog, assisted recently by Doc Martin actor, Martin Clunes.

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Yet Churchill’s television ad not only offers a 50 per cent reduction on home cover but states “includes a 25 per cent introductory discount and a five-year no claims discount”, followed by “minimum premiums apply”.

This clearly suggests that the NCD – unlike motor insurance, still uncommon with home cover – is a complementary part. It transpires that the NCD only applies to clients who qualify for it. It is hardly the bonus suggested by the ad.

It goes further. The half-priced premium is not available to newcomers. It is available to clients who have been claim-free for the past five years.

Precisely what Churchill means by “minimum premiums apply” in the same context is not transparent.

It could mean the insurer’s role to discount is effectively hampered.

The ad could hardly be entered for the Plain English Campaign where corporate members are committed to clearer communication, such as financial provider Phoenix Life.

The ad may carry enormous appeal but its contents are misleading.

Whilst often insurance blurb would be better written by an advertising agency than an actuary, in this case the brief has been exceeded.

Stephen Hester, RBS’s chief executive, has enough current banking problems on his plate but should sort Churchill out before it has to be sold in 2013.

The EU ordered the sale following the Government’s bail-out and a separate stock market listing is likely.

This campaign is likely to set it back.