Qualified advisers answering your
Financial Questions
call 0800 092 1245

Insurance comparison websites are failing customers


Insurance comparison websites are not giving consumers the “appropriate information to make informed decisions”, according to the Financial Conduct Authority (FCA).

The FCA reviewed 14 comparison sites and said that some of them were failing to meet regulatory standards.

They said that comparison sites focused too much on price, rather than the different features each insurance product included.

Because of this, some consumers were in danger of purchasing an insurance policy without being made aware of certain terms and conditions, such as how much excess they would have to pay in the event of a claim or if premiums increase over the term of the plan.

Misleading service

Clive Adamson, the FCA’s director of supervision said: “Our review found that they were not meeting our requirements in delivering fair and consistent outcomes for consumers”.

Mr Adamson also claimed that there were also a number of “misconceptions” about the service customers were getting.

He said that some customers believed that the comparison site had assessed their individual needs and suggested policies based on how suitable it was for them. However, this is not the case with some price comparison sites, as policies were listed from the cheapest to the most expensive.

An example of how a customer may be mislead could be in the case of an Income Protection plan, where the price comparison site suggests the plan with the cheapest initial monthly premium, without telling you that premiums increase every five years.

However, in this event, the product with the cheapest monthly premium may not be the best option.

This is because it does not take into consideration the cost of rising premiums over the term of the contract, and because of this it might be better to select a policy with the same features, but with a higher premium that is guaranteed never to rise over the term of the policy. Although you would pay more in the short term, you could save money in the long run.

Price comparison sites are now one of the most popular methods for consumers to purchase their insurance products, as over eight million people used a comparison site to buy their car insurance alone last year.

However, the FCA said that these consumers were not being provided with a suitable service, and that they will now provide individual feedback to the price comparison sites that were reviewed. It is expected that the comparison sites in question will be required to take action on the areas that they are failing to meet FCA regulations.

Need financial advice?

If you need to ask a financial question then please contact our financial advisers online or over the phone to get help with your query.

Share this..

Related stories

Financial Guides

Financial Calculators

Our useful calculators can help you get your finances in order:

Latest News


Helpful new tax year facts that could affect you and your money

Blog | Seven helpful new 2016/2017 tax year facts that could affect you and your money. Our recent online blog shares a brief outline on how to stay up to date.

Read more

Useful Links

Popular Searches

Please Enter More Details

Enter More Details