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Why using a comparison site can lead to pricier car insurance

Quirks in application questions can inflate your quotes by hundreds of pounds

Comparison sites help drivers get prices from hundreds of car insurers in minutes, but new research by Which? Money has found that quirks in how some sites word their questions can affect your quote by hundreds of pounds.

A comparison site operates by asking all its customers to answer a single set of application questions, which have been agreed by the insurers on its panel. The information you give is then used by insurers to set quotes.


The incorrect assumptions that could cost you hundreds

However, because the questions comparison sites ask aren’t always as detailed as those asked directly by the insurers, assumptions will sometimes be made about aspects of your circumstances or claims history. These can go on to affect the premium you’re offered.

We examined the questions asked by four major sites – Compare the Market, Confused.com, Go Compare and MoneySupermarket, and ran quotes for a South London-based Honda driver. In our scenario, the driver had had a recent accident but hadn’t claimed on his insurance for repair costs.

Across all four sites, it was compulsory to declare any incidents our driver had been involved in within the last five years. But Confused.com and MoneySupermarket, didn’t ask any follow-up questions about whether the incident had resulted in a claim.

We clicked through from these two comparison sites to the websites of the insurers that returned the ten cheapest quotes, and checked the assumptions that had been made about our claims history.

Two firms – Hastings Direct and Churchill – had incorrectly guessed that our driver had made a claim and factored this into his premium. When we corrected the error on Hastings’ website, the premium was revised down by £10.

More dramatically, Churchill cut its premium by £207 – more than a quarter of the original price.

Customers ‘should check their data’

When we spoke to Confused.com, it told us that insurers can check industry databases to verify claims records.

Hastings, however, told us that insurers make ‘assumptions’ about whether a claim was made where there are gaps in the information supplied by comparison sites –  adding that customers should check their data when applying.

Insurers do let you check their assumptions before finalising your purchase, but inaccuracies – particularly subtle ones – aren’t always easy to spot.

For example, when we clicked through to Churchill’s site, its summary of assumptions indicated that we had one previous claim, but we had to be in the process of editing our driver’s details to find that an option existed for us to specify we’d been in an accident but not made a claim.

Churchill recommended that customers who are unsure about the impact details have had on their premium should call their insurer.

Confused.com added that it was committed to providing the most accurate prices for customers, and would use our findings to help make amendments to some of its claims-related questions.

MoneySupermarket told us that they work with insurers to make sure they are asking customers the right questions so they can provide a quote – but do not control how insurers interpret the data, nor any assumptions they make.

Do you have a fault claim?

We also found that while all four comparison sites we looked at ask if you were at fault for an accident, none explain during the questions what ‘fault’ means.

To an insurer, a ‘fault claim’ is one in which your insurer had to pay out money it was unable to recover – and so could describe incidents where you weren’t to blame but where the other driver couldn’t be traced, such as a hit and run collision.

In October 2018, we challenged 2,099 members of the public to correctly distinguish fault in a claim from blame in an accident. Only 11% succeeded.

Five tips for getting the best car insurance quote

Shopping around at renewal time is the most effective way of minimising your premiums, and comparison sites are an invaluable tool in doing this. But here are five cost-cutting tips you might not have considered.

1. Be smart when comparing. Different routes to an insurer can yield different results in your premium, so try to find the cheapest one before committing. This involves trying multiple comparison sites, if you can – or at the very least seeing if you get a different price by going directly.

2. Check the fine detail. If you’re coming from a comparison site, the insurer should provide you the opportunity to check assumptions – some of which you may not have been asked about on the comparison site itself. These can include details around claims or even particular extras you might own, such as a dash cam. Make sure you’re not being sold short.

3. Act quickly. The longer you put off buying insurance, the more expensive it gets. When we ran quotes for four different drivers, we found that varying the nearness of the policy’s start date from three weeks to the following day could add up to a fifth to the quote.

4. Less may be more costly. For a south London-based driver, we looked at the cost of different levels of cover via a comparison site – comprehensive; third party, fire and theft; and third party only. The most pricey of these, on average, (by 20%) was third-party-only. If most customers who own a particular type of policy are high risk, this will affect the prices insurers can offer.

5. Improve your credit score. Insurers take a keen interest in your credit history, so if there are elements of it you can improve, or that need correcting, be sure to do so.

  • The full investigation appeared in the September issue of Which? Money magazine. You can try Which? Money today for just £1 to have our impartial, jargon-free insight delivered to your door every month.
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