Some 51% do not understand what factors are taken into consideration for working out policy prices, the poll of 2,000 motorists commissioned by Co-op Insurance found.
More than two-fifths (43%) view motor insurance as a "grudge purchase", while 15% say they would not buy it if it was not a legal requirement.
The research also revealed that 42% of motorists do not realise their insurance provides cover if another driver claims personal injury compensation following an accident that is their fault.
Co-op Insurance is campaigning to improve transparency about how premiums are calculated.
It has released a video which states that the proportion of the total cost that goes towards theft or damage of a policyholder's own car is just a fifth.
Around a quarter goes towards cases where a driver injures others, while a fifth is for repairing damage to other people's property.
James Hillon, products and pricing director at Co-op Insurance, said: "Motor insurance can be complex and the research has found that drivers are often confused by it.
"The new video aims to answer the age old question drivers have about the cost of their premium in relation to the value of their vehicle.
"At the Co-op we want to keep communities safe and we hope that by explaining insurance it will help drivers to understand the value they get and reduce the chances of them deciding to go without insurance."