Comparison sites are everywhere and now play a key role in the sale of insurance. However, it is important to approach these sites with caution as the cheapest cover may not always be the right one for you.
The Financial Conduct Authority (FCA) released a report* of their review of price comparison websites in July 2014. The report concluded that price comparison websites were leaving customers focusing on price and brand, rather than policy terms.
In the review the FCA said that customers mistakenly believed comparison sites would provide them with quotes based on the best policy for their needs, and had assessed the suitability of cover.
It is also important to remember that not all policy options may be available on comparison websites. For example individuals with high performance vehicles to insure have more specific needs. Many of these individuals may be able to find more suitable, comprehensive and/or cost competitive cover elsewhere.
By simply going for the cheapest policy, you may find yourself short of cover when you need it most.
Many comparison websites use a blanket approach to get as many quotes out as possible. This means they sometimes make assumptions about your personal details and your requirements.
This may sound harmless but making assumptions about your insurance history, personal circumstances or policy requirements could have a drastic knock-on effect to your premiums or to the level of cover you receive.
Despite their drawbacks, insurance comparison sites can be an efficient tool for obtaining insurance at a competitive price. However just remember the following:
- Not all comparison sites compare the same providers and policies. Check which compare the most companies and which ones keep your personal details private.
- Check with your broker before you buy. Many insurers are fighting back against comparison websites and are offering similar levels of cover at competitive terms through brokers. This also gives you the opportunity to discuss the level of cover with a specialist on a one to one basis, to ensure the cover you are buying is right for your needs.
Remember that saving time will not always save you money. You should always approach buying a financial product with care and consideration.
* Financial Conduct Authority, TR14/11 – Price comparison websites in the general insurance sector. Published 16/7/14
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