Insurance comparison websites simplify the insurance shopping process, and most people now shop for insurance through these sites. Once you know the kind of coverage you need, enter a few details on any of these sites and get instant access to multiple insurance companies with the cheapest quote displayed in seconds.
While the process of buying insurance, especially auto and home insurance, seems streamlined, the same cannot be said for products.
The insured enters into a contract each time they purchase an insurance policy and, like any contract, it must be carefully examined to determine its suitability for the purchaser.
The frequency of advertising in print and electronic media by the owners of these sites drowns out the complaints and murmurs of people who may have had a claim denied because they based their insurance buying decision on price ( premium) only.
As a way of illustrating how using price alone to select an appropriate insurance policy could be problematic, let’s look at how the price of a hamburger is determined.
£0.99 might buy you a burger at a McDonald’s restaurant, but that same store will also have a burger made from a similarly sized bun for £5.99. The difference in the price of the two burgers is the topping.
While the cheapest burger may only contain beef, the more expensive offering will likely have better quality beef, possibly bacon plus lettuce, onion, mayonnaise, mushrooms, and pickles.
The £0.99 burger (let’s call it the basic burger) may appeal to some, but not necessarily be what others want.
The £5.99 Burger (ROBUSTA Burger), although more expensive, may be just what the other person needs to satisfy their appetite and is willing to pay more to satisfy their needs, as long as they are aware of the extras that add up to make this other burger expensive.
Basic vs comprehensive policies
As in the previous example, insurance policies can also be said to be basic or ROBUST/comprehensive. However, it’s not always easy for all insurance buyers to tell the difference between basic and comprehensive, especially when presented in abbreviated versions with the cheapest ranked first.
The risks covered as standard by insurance company ‘A’ could be sold as a supplement by company ‘B’.
The premium quoted by ‘A’ may appear higher than ‘B’ because the standard policy offered by ‘B’ is minimal coverage. If you later opt for this policy because of the cheaper price without realizing that some of the risks you need are not included, this could lead to a dispute when a loss/claim is reported.
Potential conflict of interest
Some of the comparison websites are wholly or partly owned by insurance companies and therefore a conflict of interest may arise. Therefore, the results of quoted premiums could be biased in favor of parent or associated companies.
The operators of these sites may also be influenced by offering high commission rates which result in the sites promoting particular brands.
Some insurers are not included
At the time of writing, some of Britain’s biggest insurance companies, notably Aviva and Direct Line, are not listed on comparison websites so you may be able to get better terms from companies that are not. are listed.
Finally, it should be noted that these comparison sites only serve as intermediaries, linking the prospective buyer to the insurance companies. They only present the premiums generated by algorithms provided by the insurers and then direct the buyer to the insurer’s website with the chosen quote. In the event of a dispute arising, attributable to a misunderstanding at the time of listing, these companies are unlikely to take responsibility.
