You may ask yourself, what is best, buying insurance through a comparison website or purchasing from a broker?
In recent years these sites have become ever more popular. Likewise, the way we buy building insurance has changed dramatically. There are now many comparison websites that are becoming more popular. It means that consumers can compare the price of hundreds of insurance products from the comfort of their own home. But is it the best way to buy insurance? Do you get what you pay for?
Why have comparison websites become so popular and are they really the better option?
These sites seem an easy option when looking for a better deal on insurance. It’s simple and easy to fill out the details and then have a wealth of quotes to choose from. They are usually ranked from cheapest to most expensive. It seems ideal for those of us that have a busy lifestyle who want the opportunity to shop around for the cheapest deal in the simplest way. But, cheap insurance is also likely to provide a very limited level of cover. The rise of comparison websites has brought about a rise in competition among insurers. They know they need to be at the top of any search results to be in with a chance of winning the sale. This has led to stripped-down cover and high excesses.
You might feel that you have bagged yourself a bargain after using a comparison website. But you may run into further costs if you have to make a claim and find that you don’t have enough cover. Obviously, you take out insurance to make sure that you are actually covered when you need to claim. What you don’t want is to make a claim and suddenly find that your insurance doesn’t cover it.
You may also find that to keep prices low some insurers have now increased the excess or added a voluntary excess. This means that if you have a £1,000 claim you might end up paying for the first £750.00.
Do price comparison sites offer the best deal?
Price comparison websites work by giving you a list of quotes for the product that you want to buy either commercial or landlords insurance. You search for what you want and the deals that match your search term show up on the screen with the “best deals” near the top.
What about excesses?
If you have ever used a comparison website. You may have seen that you are asked to state the amount of excess to pay on your policy. This is usually the voluntary excess and, this is then added to any compulsory excess. So in the event of a claim, you could have to pay a much higher sum than first thought.
Did you know that insurers pay to be at the top of the list? Insurance companies choose to pay for preferential comparison site listings instead of advertising by other means. For them, it is a better use of their money. For the end-user, though it can result in a confusing and misleading sales journey. The quote at the top of the listing may not be the highest level of cover.
Most favoured nation clauses
These are one key issue that you need to be aware of. They are the so-called “most favoured nation”. Arrangements between the insurance companies and the comparison websites. This is where the websites strike a deal with an insurer. Meaning a particular product cannot be sold at a cheaper price anywhere else.
Does this sound anti-competitive? The regulators believe it is. Because of concerns in this practice. The competition and markets authority have recently launched a separate investigation into an unnamed comparison website. Household insurance in particular. This report found that it wasn’t always the cheapest cover and/or the best possible price.
BIBA said that whilst they support consumer choice, clients need to be aware that they are not taking or speaking to experts. They may not be realising that the low prices sometimes result in having benefits stripped out or a high excess.
Price isn’t everything
While brokers always earn a commission there will always remain a place for individual advice and understanding individual needs.
This can be especially true when a customer is seeking cover for nonstandard risks that may need specialist knowledge. A broker can offer more support to a customer. To ensure that the level of cover offered meets their needs and can continue to offer help in the event of a claim being made.
Whilst price is always going to be a huge deciding factor. For many people. You might find for a very small extra amount you have much better cover well within your reach and you need to check whether you have this option. Price comparison websites don’t give you this they are looking for the best possible price at the least cover.
For instance, when people buy travel insurance based on a price. They don’t check or understand what excess they may need to pay should they have a claim. Many consumers don’t realise that any excess applied is per person and per section. Which isn’t the total excess for everyone that is covered on the policy which could also lead to a disappointment.
Whilst there are often filters available on many price comparison platforms consumers don’t always understand enough about the product to use them. As such they may not experience the negative financial impact until a claim is made which it can be too late.
Do price comparison websites offer the best deal?
Not always as outlined above. There are several different reasons why these may not be the best ones as follows:-
Assumptions – sites might make assumptions about you and the kind of insurance that you need. When you use a price comparison platform you are giving details like your age, job address and all these can affect your insurance costs. If you get a deal that doesn’t include these you might end up paying more for your cover.
Sponsored deals – some price comparison websites are sponsored by insurers. Which means they list the best deals for those insurers near the top of their listing. They should, however, have a sticker saying sponsored.
Hidden costs – deals displayed on comparison sites may not be as cheap as they seemed. Quotes with low premiums might be at the top, but the excess you will have to pay could be very high you might not be able to afford the cost if you need to claim.
Complete searches – price comparison platforms don’t always scan the entire market. Often different sites have different algorithms. This means that they can’t give you different search results so you may not be seeing the best available deals.
No thrill cover – the cheapest deals which may not cover your needs. The lowest premium and an affordable excess is cheap upfront. But you might not find it is covered for accidental damage and end up paying them more for the damage yourself. It can pay to go direct to companies like ourselves to discuss this.
Why use a Broker?
Brokers such as us will work with a panel of insurers and so will have access to the whole market. Often brokers have access to insurance products that cannot be bought on a comparison website. Buying your building insurance from a broker can give you access to expert advice and help you gain the most suitable insurance.
We will, for instance, talk to you over the phone and go through what cover you actually need. Also, discuss the property in detail and your personal circumstances. We can check what cover you already have on your current policy and then match it or increase it. You may not appreciate that a lot of insurance companies offer insurance products with low levels of cover on comparison sites. Yet brokers have policies that cover a substantial amount of items such as:-
- Property owner’s liabilities in case tenants injure themselves
- Loss of rent cover and alternative accommodation when the property is uninhabitable.
- Accidental damage
- Malicious damage by a tenant (most policies don’t cover this)
- Theft by the tenant (often excluded by many insurers)
- Trace and access for damage to the property when finding a cause of a leak
- Lock replacement
- No reduction in cover for up to 30 days when vacant
- Eviction of squatters
We would be able to provide you with fantastic personal service and you won’t just be another number in a computer. We can identify what you need in relation to any specialist cover.
One of the major benefits in purchasing through a broker is to ensure that we are able to help you when you have a claim on your policy. You will often find that claims can be quite arduous and difficult to deal with.
I have a cheaper quote from an online agent than my broker but I am not sure about the cover what should I do?
What you should do is check that your policy covers you for everything that you actually want. You will often find with online comparison sites that they are selling you the cheapest policy with the least amount of cover. It is fine to have a saving of £10.00 or £20.00 in your pocket today. But when it comes to making a claim and it costs you thousands because you haven’t got the appropriate cover. It could cost you so much more money in the future. It is important that you are aware what your policy actually covers. You will often find with online comparison sites that they cover the very bare basics such as party, fire and theft. Are you covered for malicious damage? Are you covered for accidental damage? The likelihood is no and that you will have a problem when you come to make a claim. It is not the sort of thing that people realise that they are trying to save as much money as possible. We understand that this may be the case and we will always try and guide you in the right direction to ensure that your policy has what you require. You wont be just clicking a button and not being able to speak to somebody you can actually talk to us over the phone and we will happily go through it with you. Yes we may be being paid a commission but we are ensuring that you get the best possible product and we will happily disclose this at any time. We are not being paid to show you five different policies. Having the top policy coming to the top because the insurance company has paid for it like comparison sites. Most comparison sites have an agreement with their providers that they not only pay for a commission on their policy but also pay to be at the top of the list. Whilst it may save you money it doesn’t guarantee that you have actually got the right amount of cover.
One of the main reasons people go with a company like ourselves is that it could help you save time. We have the personal touch and we will look for the best possible product for you not only the first time that you contact us but every time thereafter. We will be able to help you through making a claim and guide you through the process to make it a lot less daunting for you.
We have saved clients thousands of pounds over the past twenty years and ensure that this is not just done when you take the policy out but every year. You will often find with comparison sites is that all they are interested in is getting your business for the first year and then not thereafter. We are here to help you every year and we are not going anywhere.
Here are some examples what we have saved our clients’ money on but without reducing any form of cover:-
Right to Manage Company…
- Building consisting of 9 Leasehold Flats
- We provided a cheaper premium for the same level of cover
- Freeholders Insurance/ Managing Agents Premium – £5,814
- iInsure365 premium – £3,106
- Massive saving for the client – £2,707
- Block of 5 flats
- 100% flat roof
- Existing renewal Premium – £1,046
- Our Premium – £739
- Massive saving for the client – £307
- At renewal the next year we then saved the client another £130!!
- Portfolio of 10 properties
- Insured through a landlord association
- Existing insurers premium – £3,294
- iInsure365 premium – £2,584
- Total saving for the client – £710
- 2 bedroom mid-terrace house
- Existing insurers premium – £360
- iInsure365 premium – £275
- Total saving for the client – £85
Why don’t you look at our Google reviews a constant five stars can’t be wrong. Yes they are all clients and none of them are made up and we can assure you you wouldn’t get that on a comparison site. We are here to help you every year not just one year and to ensure that you are a long term client of ours and that you recommend us in future. It is in our ethos. Don’t hesitate to contact us on (01273) 827090.
What to do next?
If you decide to buy from a comparable website it may be an idea to check the policy wording. This is to ensure that your property and possessions are adequately covered and you are aware of what is not covered should you make a claim.
We will be able to provide you with added benefits and look at the small print.
Please do not hesitate to contact us in this regard.