insurance comparison sites

[pompeyfaith]

Are they really the cheapest option by this i mean say 50 insurance companies use a comparison site do they inflate there prices knowing that with all the advertising these comparison sites get customers think they are the cheapest option.

 

I ask this because direct line used to use comparison sites but then pulled out a while ago. I sure do think its a case of insurance companies pulling together.

 

I used to use these sites all the time for my car insurance but this year i will use a combination of comparison sites and a few that don't use them and a couple on the high street to get my quotes.

 

What you think guys n dolls.

 

Regards

 

Leon

[scaniaman]

Don't know if these sites are designed by "Clones" but they are certainly set up for "Clones". Irrespective of how good a lifetime record you have, they are only interested in your last 3 years history. Most sites do not have any provision to explain circumstances, and ask stupid questions in relation to Cost of Claims. One company actually admitted to me that they don't really need this info, but just ask. (how in the hell are you supposed to evaluate third party claims?). Having spent night after night on these sites, typing in the same repetitive questions, i got really P----d off, and phoned a company I used to insure with. Because I could explain my circumstances, I got a very good quote in about 10 mins, and just accepted it. A major problem with most insurance companies is that they have never read a dictionary, to find out what the meaning of "Comprehensive" is. When you add up all their "Extras" many of their quotes are not all that competitive. Some of them blatently Cherry Pick their customers.

I have just been in touch with the OFT, amongst others, to report a racket wherebye a person may have a perfect record for all their driving life, but are treated like a teenager just because they can't prove last 3yrs history, which means they start at square one with no NCB. How many wifes/partners have only been named drivers for many years? Because of stupid nature of on- line questionaire, it makes me wonder how many cars are technically not insured, as HONEST people have inadvertantly told lies in the completion of these proposal forms.

Methinks these Ins. companies are in need of a shake up similar to what banks are presently going through.

Wish many others would also complain

[Wulfyn]

Comparison sites (gocompare, confused, moneysupermarket etc) are meant for the general masses. Remember that like every other company out there they are after making the easiest profit they can. Their business model is to try to sell to as many people as possible in an easy way - so they target the mainstream, and they use the internet.

 

 

The other model they have is to be as cheap as possible. On average the site will get £40 for every policy you sell through their website, and so because of this they are really only aiming to do 2 things - get as cheap a quote as possible to beat their competitors, and to get as many people as possible using their site.

 

 

Because most people are price sensitive (that is they are looking for a low cost, rather than a strong product) then the comparison sites are also price sensitive, because remember they want to sell to as many people as possible so they target the largest market group. Now it may surprise many people here to think of insurance as a 'product' and thus things like quality be mentioned, but anyone who has had a particular bad or good experience dealing with a claim, or found out that something they thought was covered is not covered then they will know exactly what I am talking about.

 

 

In order to be as low priced as possible comparison sites will rip their product to shreds (high excess, very little covered etc) in order to get dead low prices. Because they know people don't know much about what they are buying they know that it'll be a case of too little too late for many people that don't realise what they are getting. The insurance policies will therefore give a much lower price and come top of the listing.

 

 

The problem is that other insurers (such as Direct Line as in your example) don't offer a low cost low quality product (ignoring tesco simple that was introduced after they pulled out of the comparison game). These companies will feature on the list of insurers, but will hardly get any sales because their price is so much higher than the low quality products. Of course the comparison sites don't mind this at all, because although they are not getting much commission they can use that insurer in their adverts to attract more people onto their website. If a comparison site didn't have a single insurer you have heard of on it are you going to be less likely to go there? Chances are most people will answer yes.

 

 

So Direct Line a couple years ago made the (somewhat brave at the time, but I think correct) decision to pull out. They were getting nothing from it, and being used to drive profits of other companies that would be attracted onto a website that would take business away from them. Furthermore it actually damages the brand name of companies such as this because people who use that site will see their much higher price (often for a much better product) and just think "oh, they are expensive, I won't try them again".

 

 

Norwich Union has recently followed this trend (a good decision for them as they also offer a higher quality than average product), by pulling NU Direct. However the ironic thing is that many high street non-insurance names (Barclays, Asda, Post Office, AA, Marks and Spencers) are either underwritten by a big insurer or are on a panel of insurers. So even though NU are no longer 'on' the comparison sites, there is still a chance (at the moment) that you can get an NU underwritten policy.

 

 

 

Of course this doesn't make comparison sites evil, they are just doing what all the other big companies out there are doing. If you know what you are looking for then they can be a fantastic way of getting a very good price for the insurance you require. Both my car and household insurance were purchased through comparison sites, and I would always suggest that people take the time to go to one or two to get an idea of a price range. However be warned that the lowest policy is not always the best policy for you - so be careful in what you sign up for!

[patdavies]

Also be aware that some of the comparison sites are actually owned by the insurance company and therefore tend to push only their own brands.

[ReasonableRon]

Comparison sites (gocompare, confused, moneysupermarket etc) are meant for the general masses. Remember that like every other company out there they are after making the easiest profit they can. Their business model is to try to sell to as many people as possible in an easy way - so they target the mainstream, and they use the internet.

 

 

The other model they have is to be as cheap as possible. On average the site will get £40 for every policy you sell through their website, and so because of this they are really only aiming to do 2 things - get as cheap a quote as possible to beat their competitors, and to get as many people as possible using their site.

 

 

Because most people are price sensitive (that is they are looking for a low cost, rather than a strong product) then the comparison sites are also price sensitive, because remember they want to sell to as many people as possible so they target the largest market group. Now it may surprise many people here to think of insurance as a 'product' and thus things like quality be mentioned, but anyone who has had a particular bad or good experience dealing with a claim, or found out that something they thought was covered is not covered then they will know exactly what I am talking about.

 

 

In order to be as low priced as possible comparison sites will rip their product to shreds (high excess, very little covered etc) in order to get dead low prices. Because they know people don't know much about what they are buying they know that it'll be a case of too little too late for many people that don't realise what they are getting. The insurance policies will therefore give a much lower price and come top of the listing.

 

 

The problem is that other insurers (such as Direct Line as in your example) don't offer a low cost low quality product (ignoring tesco simple that was introduced after they pulled out of the comparison game). These companies will feature on the list of insurers, but will hardly get any sales because their price is so much higher than the low quality products. Of course the comparison sites don't mind this at all, because although they are not getting much commission they can use that insurer in their adverts to attract more people onto their website. If a comparison site didn't have a single insurer you have heard of on it are you going to be less likely to go there? Chances are most people will answer yes.

 

 

So Direct Line a couple years ago made the (somewhat brave at the time, but I think correct) decision to pull out. They were getting nothing from it, and being used to drive profits of other companies that would be attracted onto a website that would take business away from them. Furthermore it actually damages the brand name of companies such as this because people who use that site will see their much higher price (often for a much better product) and just think "oh, they are expensive, I won't try them again".

 

 

Norwich Union has recently followed this trend (a good decision for them as they also offer a higher quality than average product), by pulling NU Direct. However the ironic thing is that many high street non-insurance names (Barclays, Asda, Post Office, AA, Marks and Spencers) are either underwritten by a big insurer or are on a panel of insurers. So even though NU are no longer 'on' the comparison sites, there is still a chance (at the moment) that you can get an NU underwritten policy.

 

 

 

Of course this doesn't make comparison sites evil, they are just doing what all the other big companies out there are doing. If you know what you are looking for then they can be a fantastic way of getting a very good price for the insurance you require. Both my car and household insurance were purchased through comparison sites, and I would always suggest that people take the time to go to one or two to get an idea of a price range. However be warned that the lowest policy is not always the best policy for you - so be careful in what you sign up for!

 

An excellent post Wulfyn. Very informative and confirms what I have long suspected. Tipped your scales mate

[LemonTwist]

I agree with Wulfyn's post too. When people are buying insurance, it is very important that they focus on the quality of cover and the standard of customer service and not just the price, to ensure they buy a policy which is suitable for them.

[gyzmo]

My policy on these things:

 

1: Allow half a day for the following, and a good supply of tea, biccies etc.

2: Write down what it is you need and how much you are prepared to pay.

3: Phone each broker / insurer direct for quotes (use saynoto0870 to get landline / freephone numbers).

4: Whittle your list down to three and ask for specimen policies and written quotations.

 

Don't forget that comparison sites do not ask all the questions taht all insurers want to know. In such a case, the premium can vary (and I have found taht some T&Cs on comparison sites are outdated).

 

Time consuming I know, but it is the best way of guaranteeing you are getting what you want.