Comparison sites ‘add £400 to policy prices’
POPULAR price comparison websites are ripping off households by as much as £400 on home insurance, an investigation has found.
Homeowners are being overcharged because the websites make too many assumptions when calculating costs, according to consumer champions Which?
The same problems mean that, in some cases, customers are being undercharged – potentially leaving them with invalid policies or insufficient cover.
During the investigation, Which? requested home insurance quotes on three homes in South London and Cambridge using Compare the Market, Confused. com, GoCompare and MoneySuperMarket.
The sites ask questions about homes to work out the cheapest deals available.
However, Which? found substantial differences between the sets of questions could leave insurers relying on assumptions about customers.
Imprecise questioning about flooding, for example, pushed up one of the quotes to around £704 from £291 – a £413 increase – and another down from £429 to £142.
Meanwhile, two sites did not let users say when their house was empty over the weekend. This pushed down prices by as much as £98 in one case.
Other examples that inflated premiums included assumptions about the time frame during which subsidence had occurred, incorrect estimations regarding no-claims records, and presumptions about bankruptcy among members of the household.
Which? also uncovered four factors that resulted in artificially reduced premiums, which could potentially leave homeowners without the level of cover they need or even an invalid policy.
Jenny Ross, Editor of Which? Money, said: ‘To make sure you’re getting the right price, be sure to compare different routes for buying your insurance, shop around every year, and always double check that the information the insurer has about you is totally accurate and complete to avoid being stung.’
A GoCompare spokesman said: ‘We continuously and proactively review and revise our services to reflect the needs of both our customers and our partners, and we will investigate the anomalies Which? has raised in detail to identify and correct any issues.’
A Compare The Market spokesman said: ‘Different insurers have different risk models, and as such factors which may influence the price of the quote often vary between providers. It is therefore imperative for consumers to shop around when comparing policies.’
A Confused.com spokesman said: ‘We work closely with insurers to make sure our quote process is built to meet their requirements and provides accurate information based on their preferences.’
A spokesman for MoneySuperMarket said: ‘We work closely with insurers to ensure the information we ask for will enable them to provide customers with a complete quote based on their current circumstances. We also make updates to the customer experience based on feedback we receive.’