The Financial Conduct Authority (FCA) which regulates the banking and insurance industry conducted a review into the role price comparison websites play in arranging insurance and has concluded that these sites could be ‘misleading’ customers.

Let’s face it, most people use price comparison websites to find the cheapest possible insurance. But is the cheapest insurance always the best insurance? The main problem is, insurance is a very intangible service, and the benefit or value of the service is only appreciated, when it’s needed – when you make a claim.

There are so many options available to the customers these days, allowing them to tweak their levels of cover online, that the main challenge almost becomes how low one can make their quote. Unfortunately, this means that sometimes, customers unknowingly reduce their levels of cover to achieve the lowest possible price and when they make a claim, find they are underinsured or even that the policy is void as the cover was incorrect.

An insurance broker will be able to advise a customer as to the best value insurance, not necessarily the cheapest insurance. In the long run, if things go wrong, it can be a lot cheaper if you are adequately insured.

We encourage customer, who have shopped on these comparison sites, to allow us to look into their quote as part of our personal service. It’s important to understand that more often than not, a cheap price is not actually a like-for-like quote and in many cases the insurance policy is incorrect, as they have missed out vital details.  Common mistakes we have found are:

  • Users being asked to report claims/accidents/convictions in the last 3 years (insurers require 5 year history)
  • Users setting their own Excess – customers think they are choosing their own excess amount but this can be the VOLUNTARY excess amount will be on top of the COMPULSORY excess you have to pay
  • Correct usage – if you use the vehicle for business then you need the correct usage on your insurance.  There are many different levels of business cover (Class1, Class 2, Class 3, hire and reward, courier, etc).  Opting for business use is not always the correct choice!

Here at Coversure Rubery, we feel that it’s about time the FSA looked at how price comparison websites conduct themselves. The comparison sites put the onus on the customer to choose their own insurance and most people do not understand or deal with the complexities of insurance on a day to day basis so they can easily under insure themselves or even purchase a policy that is incorrect for their needs.

We find that a lot of customers that have tried these websites prefer the personal touch and appreciate professional advice that they can only get from speaking with a local broker.

David Blackman from Insurance Times, said in his article on this review “Nobody likes to spend longer than they have to, but the FSA shows aggregators [price comparison websites] have cut too many corners”

It remains to be seen how price comparison sites react to this review from the FSA, but one thing is for certain; the FSA will be keeping a closer eye on how these websites transact with their customers.

If you’re confused about insurance and feel that price comparison sites aren’t giving you as much advice as you would like, contact us or call us free on 0800 308 1093.