Comparing insurance on multiple comparison sites and policies from those insurers who do not advertise on them is the best way to maximize your chance of saving a great deal of money.
Your comparison health-check
- keep an open mind that comparison sites might be affiliated with certain insurers
- check all the relevant policy and excess details thoroughly
- always check whether you’re being herded towards the ‘best buy’ policy, which is in fact a sponsored deal
Do you trust comparison sites?
Insurance comparison sites make a profit, so can we really expect them to act purely for the good of our wallet the whole time? Obviously not all the time.
Since their rapid rise in popularity, many of us admit we mistrust them (according to a 2009 this is money survey) and for good reason.
I’m going to highlight three little known, but big, facts that comparison sites aren’t so upfront about and which could save you money.
“Three secrets: 1 compare the middle-man, 2 compare the policy and excess, 3 don’t compare the ‘deal of the day’.”
- Compare the middle-man
Let me ask you – do you actually know if an insurance comparison site is really giving you the best value quote?
Probably not: they’re the middle-man, they’ve got the links and they bring you deals from preferred suppliers.
It makes sense if you’re a financial institution to hedge your bets. So, for example, Confused.com is in fact owned by Admiral and Tesco Compare is in fact 50% partners with Royal Bank of Scotland, which owns Direct Line and Churchill.
Unless you’re prepared to spend hours searching business records (we’ve already done that) it’s not easy to find out who’s affiliated with whom.
Take action: Keep an open mind that comparison sites might be affiliated with certain insurers – why not compare more than one comparison site?
| Moneysupermarket.com |
| Confused.com |
| Gocompare.com |
| Comparethemarket.com |
| Uswitch.com |
| Tescocompare.com |
| moneyextra.com |
Some of the leading comparison sites (according to a Financial Services Authority (FSA) study 2009). As well comparing the middle men it is equally important to get quotes from those insurance companies that are not on comparison websites. These insurers could save you even more money compared to those insurers on insurance comparison sites as they only provide their own insurance policies directly through their websites – click here to find out who they are.
2. Compare the policy and excess
Avoid disaster, a red face and the insurance money-trap.
Take extra care to be sure the policy is relevant for you when buying through a comparison site.
And watch out for the excess scam. Comparison sites are trying to make as much money as possible, for example excesses of up to £500 on motor insurance policies, which aren’t always in your best interests
Financial regulator the Financial Services Authority (FSA) caught out ruthless and ‘leading sites giving incorrect and out-of-date information that could be misleading’, in its investigation into 17 leading comparison sites.
What it found was ‘a number of the websites reviewed failed to provide the same level of information for each of the policies listed… certain policy features were not provided in the policy.’
In balance the report found that ‘many firms had made significant improvements and are consistently providing clear, fair and not misleading information.’
Take action: check all the relevant policy details through – paying more might actually be better value when things go wrong and always check the excess.
3. Don’t compare… the ‘best buy’
It’s an old trick – getting you worked up about saving on your insurance by comparing what’s out there at the click of a button, but if you’re not careful you’ll in fact be buying the wrong policy. Beware the ‘best buy’ policy.
No wonder that in February 2010 the comparison industry snubbed and then ditched the self-regulatory watchdog ‘The Comparison Consortium’.
Instead, they’d much rather be dreaming up new ways of switching the real deal for the sponsored deal right under your nose.
Often, hidden under the guise of ‘best buys’ or ‘editor’s choice’, what you’re actually getting is in effect an insurer paying the insurance comparison site to present them in a way that makes you think it’s the best choice for you.
There are clear guidelines for websites to provide clear and fair information, but again and again studies, reports and FSA visits have found varying degrees of transparency in these areas.
Take action: always check whether you’re being herded towards the ‘best buy’ policy that’s in fact, a sponsored deal – it might not be right for you.
Having revealed these three shocking secrets, we still think comparison sites have a useful role to play when searching for insurance. The main thing is not to rely on one comparison site.
Next time you’re after an insurance deal, why not compare two leading comparison sites and one or more individual brand?
Now you’re clued up on the matter, why not compare comparison sites with those insurers not on comparison sites.
This article is part of a series on insurance comparison sites by insuranceadvice.co.
Hello!, Very interest angle, we were talking about the same thing at work and found your site very stimulating. So felt compelled to com?ment a little thank you for all your effort. Please keep up the great work your doing!
I don’t usually reply to posts but I will in this case.
my God, i thought you were going to chip in with some decisive insght at the end there, not leave it
with ‘we leave it to you to decide’.
Hi Kindersportwagen.
Thanks for your comment.
We’ve thought about what you’re saying and just to clarify we’ve updated our advice.
We’re not saying that comparison sites don’t have a useful role to play. We just don’t think you should use one comparison site, for the reasons in the article – instead why not compare more than one and look at one or more individual brand?
Thanks for the info
Great writing, I have been waiting for that!!!