Do you use a comparison website to help you get a better deal on your car, home, travel or just about any type of insurance?
Well, we’ve got a bit of a warning for you.
These sites give us thousands of comparisons instantly and for that we are very grateful.
Big names like Moneysupermarket.com, Compare the Market,
Confused.com and Go Compare (as well as a few others!) have dominated
the market in the past few years.
The Financial Conduct Authority (FCA) – the government body that looks after financial companies and policies – has found that some websites that offer comparisons of insurance products are ‘failing to meet consumers’ expectations of them’ and in some cases they’re failing to meet regulatory standards.
It has warned that some of these websites are not giving clear information to customers and that some people could end up buying insurance products without understanding key features, such as the level of cover or excess. This is because they instead concentrate on finding the cheapest price.
Today the FCA said that it is going to give individual feedback to the price comparison websites involved and will be asking them to make changes if they are not meeting regulatory expectations.
In the meantime, we’ve pulled together five things that you should watch out for when using a price comparison website.
Do you have anything to add? Tell us what you think in the comment section below!
Pushing deals that might not be the best for you
After investigating 90% of the comparison website industry the FCA has concluded that some comparison websites are not serving customers in the best way.
But how are these websites failing to meet regulatory expectations? Well, the FCA is concerned that they’re putting their profits ahead of what’s the best deal for you.
That means that you can’t always clearly see what the policy covers or what the excess payment is for the insurance you’re taking out.
They sometimes make assumptions about who you are
When you use a comparison website to find a product, particularly insurance, it will usually ask you a set of questions to recommend the best policies for you.
But because it can’t ask you every single question necessary it will make a set of assumptions about you and the level of cover you need.
That’s why it’s VERY important that you read the small print – don’t get caught out by paying for insurance or taking out a product that isn’t suitable for you.
Lower premiums BUT higher claim costs
The amount you pay when you claim on any insurance policy is called an excess. The general rule is that the lower your premium (the amount you pay regularly) the more you will have to pay to make a claim. Think carefully about the level of excess you would be willing to pay if the worst happens – particularly if you’re insuring low-value products.
It’s a party that not everyone is invited to
Not all comparison websites have every product and every company listed. Some of the bigger ones have exclusive deals, which is excellent for those that use them. But if you’re using a different website you could miss the offer.
And if you’re taking out an insurance product then it’s IMPOSSIBLE to compare the whole of the market. Some insurers, like Aviva and Direct Line, do not appear on comparison websites and you’ll have to approach them separately for a quote.
Those characters might be cute… but don’t let them fool you
They love a gimmick and they’ve got super savvy marketing ploys. From meerkats to opera singers, they know how to get your attention. But some experts have argued that it’s dangerous to focus on cheap policies because they don’t always provide the right amount of cover needed. Double check your policy before buying any insurance.
What do you think about comparison websites? Tell us in the comment box below.