Fair Comparison?
According to the Financial Services Authority (FSA) some of the websites that offer comparisons on insurance quotes provide information that is either out-of-date or in some cases simply inaccurate. The FSA was keen to point out, however, that other sites in the growing industry were fair, clear and accurate.
The watchdog found that although all the sites were properly authorised there was mixed and confusing evidence, and the clarity, fairness and accuracy of the information was questionable in some cases.
Important things such as compulsory excess levels were sometimes excluded from the price, or simply incorrect. Whilst in other cases warnings were issued to customers to consider other factors than simply the price, but little other information was given, and others only listed some of the features of any given policy, though the price was always included. Perhaps most importantly, quotes on certain sites actually differed from the amount charge by the broker or insurer.
The number of price comparison websites has rocketed in the last few years, covering most of the products in the financial sector. They have been incredibly successful and lucrative, one of the individuals who set up one of the first companies is now worth in the region of half a billion pounds.
However the FSA is keen to point out that price comparison sites may not always offer the best deal. Aside from the inaccuracies of certain sites, which presumably will be corrected now, many sites receive a commission from the companies that they recommend, which may boost the price making it cheaper to go direct to the insurer.
Price comparison sites effectively do the legwork that is always recommended when it comes to buying insurance, or a mortgage, getting a loan, or a new bank account. The theory being that if they compare all the offers for you, you will ultimately end up with the best deal, unfortunately this is not altogether true as these companies have to make a profit somewhere in the transaction and that profit is only going to come from you.
In the wake of the report by the FSA, Internet comparison sites will be required to provide their customers with more information than they have previously done so. Ultimately, though, there is no comparison for knowing what you are looking for yourself, take a bit of time and research the basic terms used in connection to insurance, and take a look around to make sure you are aware of all the options available. Internet comparison sites might be a good starting point for a quote, but if you have the time it’s always worth ringing up for yourself and making sure that the money you spend is going as far as it possibly can.
Always use a reputable firm – such as RIAS – for your house insurance.
