Renewing your home insurance?

Three reasons to be cautious about comparison websites

While future generations may find it impossible to believe, there was a time when we actually had to go places to get things done. Those halcyon days of the High Street when you’d head to the local travel agency to book a holiday, browse estate agents’ windows to find a house and, heaven forbid, actually visit your nearest bank branch to move some money.

Then came huge advancements in technology, not to mention a pandemic and suddenly it became the norm to do almost everything online, from simple grocery shopping to buying cars – and even arranging financial products. Consumers will now spend their time keying in a multitude of personal details to compare different deals for everything from their home insurance to their credit cards. Figures suggest around 15 million of us used comparison sites in 2019. But while it may be perceived as a good way of saving money, is it a smart move?

In recent years the price comparison site sector has come under increased scrutiny from various regulatory bodies with concerns expressed over how well they serve users. So what seems to be the problem? We take a look at three reasons you might want to give such sites a miss.

1. The policy cover levels might be very low – One of the biggest problems with comparison websites is they lead customers to make a choice primarily based on price. While everyone wants to get a good deal, choosing an insurance policy on price alone can leave you with a policy that is not fit for purpose and that may not actually pay out should the worst happen.

2. The policies may be wrong – If you’re looking at policies on a price comparison site you probably think you can be confident the details you’re reading are accurate. Unfortunately, that’s not always the case. Consumer group Which? recently looked at policies on offer on four of the main comparison websites and compared them against the policy documents from each insurer. Shockingly it found six out of ten policies has mismatching details. That means the policy you sign up for may not be what you actually get.

3. Beware of the renewal price – It may seem a great deal and it could well be, but price comparison websites often offer policies that cost the insurer money in the first year because the price is so low. This then leads to significant price rises at renewal as they look to make a profit out of you – meaning that the great deal doesn’t look so good 12 months down the line.