Why Insurance Comparison Sites Don’t Always Give You The Best Deal
First things first. We’re not saying that insurance comparison sites aren’t a good idea. They have helped thousands of people to get a better deal on their insurance – and that’s a great thing. But they can’t always be relied on to give you the very best price for your insurance. And if you have any specialist needs, you could find yourself under insured. If you’re not careful, that can cost you big in the long run!
How do comparison sites work?
Price comparison websites do exactly what they say – they compare the prices of products or services between a selection of different shops or providers. If you’re looking at an insurance price comparison site, you enter your details and it will compare premium prices from a range of insurance providers. Premiums are then listed in order of cost, starting with the lowest to help you find the best price. Sound too good to be true? Well, that’s because it is not quite that simple.
A comparison site will find you the cheapest price for insurance offered by the companies who have signed up to them. Not every insurance provider uses comparison sites, and you’ll find different insurance providers listed with different comparison sites. So to truly find the best price possible for your insurance, you’ll have to compare more than one comparison site and will also need to get in touch with those insurance companies who don’t use the sites.
There are also some other things to bear in mind.
1) Price comparison sites earn a fee for every new customer they refer. Those fees can vary from insurance company to insurance company. You could find the price comparison site might try to get you to sign up for the insurance provider who pays them the biggest fee.
2) The results you get back might seem impressively low, but there can be hidden costs lurking, which bump your premium right up.
3) If you submit inaccurate or incomplete information, your insurance could be invalid or insufficient to cover your needs.
Comparison sites are in it to make money
Comparison sites are multi-million-pound businesses. The insurance group that owns one of the biggest, Compare The Market, is currently preparing to list on the stock market valued at an anticipated £2 billion.
Comparison sites are not just doing the legwork for you to help you save some cash. Every referral they make will earn them cash. Some referrals will make more money than others, so consumers need to be aware that some sites could be prioritising insurance deals from certain providers. If an insurance provider isn’t prepared to pay the comparison site a fee, their products won’t appear, so you need to be mindful of the fact that there could be better deals for you out there.
You’ll also discover that some of the deals found on comparison sites are offered by insurance brokers, and are not direct from an insurance provider. That means that although it looks like you’re being given a wide choice of offers you could just have several brokers offering the same insurance product from the same insurance company. As well as the price comparison website making money on the transaction, the broker also needs to take a fee – so you might have found it cheaper to just go to the broker in the first place.
The hidden costs behind the seeming knock-down prices
To get the best price on insurance, consumers need to be aware of some of the tricks comparison websites use to get your business. Some of the low-cost deals you might be offered actually come with a load of hidden extras that can bump the price right up again. These extras can include things that normally come as standard on any policy.
For example, many comparison sites don’t give you the option to choose your level of excess (the amount you have to pay if you make a claim) at the point when prices are compared. They can automatically add high excesses to bring down the prices of some insurance premiums and make them seem more attractive to the consumer. If you reduce your voluntary excess charges, you’ll find the premium shoots up. And if you leave the high excess charges, you could find yourself badly out of pocket if you do need to make a claim.
Higher prices on spreading costs
Many of us prefer to spread the cost of insurance throughout the year by paying monthly by direct debit. Be wary of high charges for the convenience of doing this through some insurance deals sourced by price comparison websites. Some drivers are being charged as much as £200 more to pay monthly – making what appears to be a low-cost option for a one-off payment skyrocket when it comes to paying monthly.
Other hidden extras
There are some other hidden costs that you might not discover until too late and can give you a nasty shock. Check out in advance if you’ll be required to pay an administration fee if you need to make any changes to your policy in the future, for example, if you buy a new car. Also, check if you’ll have to call through a premium rate number if you do need to make a claim. Both of these hidden extras can significantly dent your wallet and make that great deal seem less great.
Insurance comparison sites can’t ask you the right questions
One of the main problems some consumers find with comparison websites is that you’re not dealing with a human. The computers don’t know what questions to ask to make sure that you’re sufficiently covered and require you, the consumer, to know exactly what information to put in. Unfortunately, this can lead to some insurance policies becoming invalid, although you won’t necessarily know this until you make a claim.
Check everything carefully before buying
When you use an insurance comparison site you’ll have a lot of questions to fill in. Some sites make automatic assumptions about your circumstances to help save time, so it’s essential to carefully double check all the boxes to make sure that the information you’re submitting is correct. Whilst it can be time-saving if you fit the ‘average’ criteria, it can be a real problem if, for example, you are trying to insure a listed property or are aged over 80 years old and looking for car insurance. If something goes unnoticed until the last moment, or worse until after you’ve paid for a policy, you could find yourself shelling out for a greatly increased premium.
So what’s the best way to get a great deal on your insurance?
For total peace of mind and a competitive price speak directly to an insurance broker like Park Insurance. We have 30 years sourcing competitive rates, with no hidden surprises, for commercial and domestic customers. We understand the ins and outs of insurance so can help you to tailor your insurance to your precise needs. Chat to us about how we can tweak your policy to reduce your premium, such as opting for lower annual mileage for your car insurance.
Insurance you can trust
Because you’ll speak to an experienced advisor, you can trust us to ask you the right questions to make sure you get the right insurance for you. That means not paying for anything you don’t need and making sure that nothing is left out too. We’re the preferred broker for some of the UK’s leading insurance companies, so we can use those relationships to secure you a great price. Whether you’re looking for something bog-standard or more specialist, we can find the right policy for you. And our friendly team are always on hand to answer your queries or help you before and after you pay your premium.
Call us on 0117 955 6835 or email us for a free, no obligation quote.