Are comparison sites helpful or misleading?
In the past on Money Bulldog we’ve spoken about the importance of not just going for the cheapest policy on offer when using price comparison sites. Whether you are searching for Life Insurance, Car Insurance or Home Insurance, comparison sites can be a great tool in helping you to find the cheapest deal available, but price is not and should not be the only concern. To an extent these kind of sites can also help you to compare some policy features but as recent findings from the Financial Conduct Authority confirm, we all need to take care that we are not too drawn in by the cheap insurance quotes on offer and end up coming away with a policy that really isn’t right for us as a result.
What did the FCA find?
So why did the Financial Conduct Authority feel the need to voice concern about this issue, and is it really that big a problem? Well according to them, it is. When reviewing the information shown when obtaining quotes from 14 different insurance comparison sites recently the FCA found that many of them presented the needed information in an unclear manner and in a way that fell short of regulatory standards. They also found that many consumers mistakenly believed that the policies being quoted to them on comparison sites we’re actually being ‘recommended’ based upon their needs and circumstances. In reality however, nothing could be further from the truth.
Price Comparison, NOT Insurance Advice
It really is important to remind ourselves that when using comparison sites we are being presented with the best priced policy, not the most suitable. Sometimes we may be fortunate enough to find that the two go hand in hand and the cheapest is actually the best, but we still have to put in a little effort and research time if we are truly going to be sure that we are purchasing the ‘right’ policy for us. What is being offered by insurers as conditions of cover can differ drastically from policy to policy, even sometimes with the same insurer as some insurers offer budget and premium policies.
Differences like the insured value of contents, whether an insurer offers old for new replacement on covered items, what the excess is on a policy and whether extra’s like the provision of a courtesy car or having legal cover as a standard part of the policy can really come back to bite in the event of a claim if you haven’t taken the time to clarify what exactly is being offered in return for your money.
Be Extra Careful with Life Insurance
I’m not saying this to minimise in any way the importance of researching other types of insurance quotes but I personally feel that people need to be especially careful when it comes to life insurance. This is mainly because it is not something many people tend to arrange or review on a regular basis and also because the implications of getting things wrong can be so huge.
Many professional advisors out there will be happy to help you find a policy that is right for your needs and they often won’t even charge you for the privilege, as they will receive remuneration from the insurance company in return. Some will even recommend a policy on an ‘advised’ basis, which means they will be liable in some way if they recommend an unsuitable policy. This is not the case with comparison sites. Life insurance quotes given on comparison sites will only be presented on a ‘non-advised’ basis and as a result you will have no comeback whatsoever if you happen to choose an unsuitable policy. Personally then, if you’re inexperienced with the ins and outs of life insurance terminology, I feel that half an hour on the phone to an experienced life insurance advisor could be well worth your time.
When using a comparison site, the buck stops with you
So really it’s just good to remember that when using comparison sites ultimately the buck stops with you. They are a great money saving tool but they do not offer any real advice as to which policy is the best policy for your needs, they are purely there to find you the best price available. There can be vast differences in the level and quality of cover being offered from one policy to another, so we all need to take the time to look at the small print and make an informed decision based not just upon cost but also upon suitability.