Price comparison sites Price comparison site pitfalls
Policies at the top of price comparison website results can include features that you don't want or need, such as a large excess or add-ons you didn't ask for.
A higher excess (the amount you pay in the event of a claim) will usually make cover cheaper, but makes claiming expensive.
As part of an August 2015 investigation, Which? found that some price comparison sites don’t ask about excesses - or don't ask the detail needed - but policies with a large overall excess tend to rise to the top of your results, even if you didn’t want this.
While you can sometimes modify your excess on the results page, asking beforehand saves time, and would mean that those who whizz past the quote page without realising they can tweak the results wouldn’t end up with a high excess they didn’t want.
In some cases, no information on excesses was automatically displayed on the results page.
Insurers know that offering free extras makes them stand out in a list of comparison site results and they can be a perk - if you understand the deal.
We found policies with add-ons that were free for a year, after which they automatically renew and you'll pay for them, unless you specifically ask to cancel.
In each case, when you clicked through to the insurer's website, you could remove the free add-ons by deselecting them, but we think consumers would prefer to actively opt in so it’s totally clear.
You’d assume that comparison sites would ensure that only policy elements you’ve requested are included in your cover if you have to pay extra for them, but this wasn’t always the case in our test.
In one of our scenarios, we selected home insurance without protection for items outside the home, but on one price comparison site we were still offered policies that included this, at a cost of about £20 extra. This didn’t happen when we got quotes from the same insurers on other comparison sites.
Such errors can leave you paying for extras you don’t need.
The illusion of choice
As well as listing policies from insurers, comparison sites show quotes from brokers. In our investigation, 30 of the 60 car insurance quotes we got were from the same company, but were offered by a range of brokers, so it seemed like we had far more choice than we actually had.
Annual vs monthly payment
Paying monthly rather than annually makes a huge difference. For car insurance, paying monthly can add more than £100. It's around £20 on home cover. The cheapest annual payment policies aren’t necessarily the cheapest for paying monthly, yet the sites don’t sort quotes based on how you want to pay.
All four sites we investigated ranked car insurance based on annual payments by default, even when we wanted to pay monthly.
Comparison sites compared
The August 2015 Which? investigation tested Compare the Market, Confused, Go Compare and Money Supermarket, using three scenarios for car insurance and three for home insurance, analysing 60 quotes for each.
Our researchers identified pitfalls in all four.
Compare The Market
- Didn't ask upfront about excesses on home insurance policies.
- Didn't show the compulsory excess on home insurance policies.
- Some results included unwanted paid-for extras.
- Didn't display annual and monthly prices side by side.
It said: 'In some cases, cover that is optional with one insurer is standard with another. It is a way for users to differentiate their products.'
- Didn't ask upfront what excess you want on home insurance policies.
- Didn't automatically display excesses on third party, fire and theft car insurance, which can be substantial.
- Mistakenly listed some policies as not offering personal possessions cover.
It said: 'On occasions, a provider may make a change to one of its policy details and forget to tell us, although our checks usually pick this up.'
- Didn't give a breakdown of compulsory and voluntary excess on home insurance – it only shows the total excess
It said: 'We have recently enhanced how prices are presented on our car insurance results page, so that where a customer has selected that they want to pay monthly, their prices are ranked in order of total monthly instalments.’
- Didn't ask upfront what excess you want to pay on car and home insurance, rather than making assumptions
It said: 'We default our voluntary excess to £250 for comparison purposes. When researching with customers, they told us this was an amount they were willing to accept. We can’t influence the total excess, given this is a compulsory element.'
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Which? Limited (registered in England and Wales number 00677665) is an Introducer Appointed Representative of Which? Financial Services Limited (registered in England and Wales number 07239342). Which? Financial Services Limited is authorised and regulated by the Financial Conduct Authority (FRN 527029). Which? Mortgage Advisers and Which? Money Compare are trading names of Which? Financial Services Limited. Registered office: 2 Marylebone Road, London NW1 4DF.