Why have comparison websites become so popular and are they really the better option?
What about excesses?
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?
- Property owner’s liabilities in case tenants injure themselves
- Loss of rent cover and alternative accommodation when the property is uninhabitable.
- 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
What to do next?
For competitive commercial insurance call us now