Car, home and travel insurance comparison websites have been condemned for providing “unclear” information to consumers.
A new report, published by the Financial Conduct Authority (FCA) today, claimed that some websites were breaking regulatory standards around the level of information provided.
The FCA reviewed 14 insurance comparison websites and suggested that many consumers experienced misconceptions about the services provided.
Some websites failed to provide information about what certain insurance policies covered or the charges associated with them. This could mean customers experience a nasty surprise when they come to make a claim.
Find out more: Price comparison sites – how to avoid common pitfalls
Websites accused of placing too much focus on price
The report suggested that many price comparison websites placed too much focus on the cost of insurance policies, and not enough on how suitable it would be for the customer.
It was also revealed that some of the websites owned by insurance companies were failing to adequately flag a potential conflict of interest. This is against FCA regulations.
Clive Adamson, FCA director of supervision, said: ‘Our review found that they [price comparison websites] were not meeting our requirements in delivering fair and consistent outcomes for consumers.
‘It is important for consumers to understand that not all products are the same and the cheapest product may not always be the best for their needs.’
The FCA has pledged to contact each of the firms involved in the study to discuss their shortcomings.
How to find the best deal for you – tips
It’s important to bear in mind that most comparison sites are set up to find customers the cheapest deals rather than the most comprehensive cover or great customer service. Here are some tips to help you find the most suitable.
- Consider value for money as well as price
- Check more than one website for the best deal. You’re likely to see different results
- Phone the provider directly if you’re not sure a deal is right for your circumstances
- Get quotes from brands who aren’t listed on price comparison sites, such as Direct Line
- Watch out for websites that preselect certain options or added extras. You may not need them.
Which? recently launched a comparison website that goes beyond just the best rates. Which? Money Compare also shows you how thousands of people rate credit card and mortgage providers for the quality of their service with our unique customer scores.
Our comparison tables include warnings on certain products showing, for example, if it’s expensive to borrow on them. You can search all available deals from providers large and small to choose the best ones based on quality of service as well as cost and benefits.