Comparison sites under fire
Despite the popularity of using a Price Comparison Website (PCW) to search for General Insurance, experts and the Financial Conduct Authority (FCA) have raised concerns over not just the compliance of the sites, but also their effectiveness in providing the right cover for consumers.
Do comparison sites really save time and money?
Consumers choose a PCW because of its perceived ability to save time and money. But consumer research by the FCA has revealed that obtaining a quote is rarely a quick process. In fact, research found that some comparison sites demanded answers to over 60 questions in order to obtain a Home Insurance quote, with many finding the volume of information and number of variables surrounding General Insurance products confusing and sometimes overwhelming.
Once consumers did reach the results page, not only did they find the options confusing, but there was also a lack of ability to compare like for like policies as well as cost. Often the lowest premiums would take priority, but the cheapest option is rarely providing the ideal cover, leaving the potential for long term consumer detriment.
Do comparison sites Treat Customers Fairly?
On the back of research undertaken in 2014, the FCA have highlighted that “a focus on price could distract from crucial product features and lead consumers to make an inappropriate policy choice that does not suit their needs and requirements”. In fact, PCWs will actively avoid going into the required detail regarding product options, in order to maintain the perception of speed and ease.
Consumers often have preconceived ideas about comparison sites, assuming them to be impartial and all-encompassing. But as the selling point of the sites is to provide a quick and easy way to compare insurance, it can often fly directly in the face of FCA guidelines on Treating Customers Fairly. Unfortunately some consumers currently use the site as a replacement for an adviser, assuming that the product they are guided towards is the best option for their circumstances.
Why is choosing an adviser a better option?
Choosing an adviser over a PCW gives consumers access to expert advice, industry connections and the knowledge that the adviser will find them cover tailored to their needs. To help in the battle against PCWs advisers now have access to tools like Paymentshield’s Premium Flex, which gives you the option to reduce premiums and bring down the cost of the policy. This means you can now deliver the best of both worlds; the perceived benefits of a comparison site, but with the peace of mind that comes from knowing they are offered the best products for their needs.