Beware of Using Sites Offering Insurance Comparisons

A review of Internet sites that compare insurance costs for consumers suggests that these sites may actually be misleading. According to the Financial Service Authority, many of these sites do not have up to date information about the policies of the insurance providers and therefore provides consumers with inaccurate quotes of the cost of insurance.

Since many consumers regularly use such Internet sites in order to find more competitive insurance policies that will help them save money, this leads to a lot of business for insurance companies.

Many of such online sites have been set up for the express purpose of making money for the website owner in the revenue earned through Google ads and affiliate marketing. The financial watchdog service of Financial Service Authority has found that only a few of these sites contain the comprehensive information that consumers need when shopping for affordable insurance. The review was prompted by the many sites that do exist for UK residents and to date seventeen of these sites have been evaluated for the accuracy of information.

Just as it is important to read the fine print on any documents before you sign them, it is also necessary to read the fine print on insurance comparison websites. The terms and conditions section of a website is one that is often overlooked by insurance shoppers, but it is here that you will find essential information related to the site.

The most commonly overlooked information is that the quotes provided in the comparisons are based on assumption rather than fact and that in order to receive an actual quote, one must contact the insurance provider directly. Thus the sites are perfectly legal and are not doing anything wrong as long as they have such statements somewhere on the site.

The reason that the FSA decided to conduct its review of insurance comparison websites arose from the need to ensure that there was fairness and consistency in the insurance industry. The work it has undertaken this year is different from that of previous years in which they were unable to take action against any of the websites. Instead the jurisdiction only allowed them to monitor such sites and follow the progress. It is only since the broad expansion of the online insurance industry that issues have arisen that demand attention and the need to bring these issues to the public.

The issues that came to light in this review included incorrect excess levels (the amount a person has to pay for an accident), incorrect compulsory levels of insurance and inaccurate pricing. The majority of consumers who have shopped on these sites and then compared the quotes they received to actual price complained about the discrepancy in the two prices to the British Insurance Brokers Insurance Association, which conducted its own review and found similar issues as the report published by the FSA. The data specialist Defaqto reports that of all ten insurance comparison sites it reviewed there is no one insurance provider mentioned on all ten sites.

Officials in the insurance industry welcome this review so that it can bring clarity to some of the issues noted by the consumer. The quotes offered are often very complex and have features that one consumer may be looking for but which is of no interest to another. There can be as many as 25 policy features included in one quote. The report uses the example of adding another car to the policy, which may not be of any use to some consumers, but is included in the quote they receive through the comparisons.

Another criticism of insurance comparison sites is that they do not point out the best buy for a consumer which means that consumers are still forced to sieve through all the quotes to find the most affordable one for their needs. Several sites have offered statements in their own defence as to how they do the comparisons for interested shoppers by saying that they do not have allegiance to one company and leave it up to the customers to make up their own mind about which policy to purchase.

The FSA has issued a warning for insurance comparison sites that they have to start providing current information about policies and prices. Experts have also noted that this sector of the insurance industry does need time to make the necessary changes recommended as a result of the report of the FSA. The BIBA is hoping that these sites will start cleaning up their act and stop the poor practices they have followed in the past.

This association wants the proper controls put in place so that this sector of insurance buying will operate in the manner in which it is supposed to for consumers. Since the FSA says that the websites must comply with the recommendations or be forced to do so, there is no doubt that changes will be noticed in the very near future.