How to use price comparison sites
Yet after a recent visit to look for motor insurance, I was reminded that these sites aren't quite as consumer-friendly as they first seem. So how should we use price comparison sites with care?
Following a quick search for insurance for my partner's work van, I found tempting policies and premiums that failed to materialise and was hounded by after hours phone calls from insurers trying to sell us cover we did not want. My partner ended up renewing with his existing insurer to save the hassle and I regretted even visiting price comparison sites to help him out in the first place.
In the summer, the Financial Services Authority announced a crackdown on price comparison sites, accusing some of leading consumers to buy insurance deals that were inappropriate for their circumstances or they are not eligible for.
While we await the sites' reponses, there is no denying that they do provide a useful service to compare hundreds of deals at once. So how do you use these sites properly and what tricks should you look out for?
1. Check what is ticked
When searching for quotes, many comparison sites make assumptions about your situation and automatically tick certain boxes to speed up the process. This means you could end up with quotes that are not relevant to your circumstances, or quotes that you simply aren't eligible for. To avoid this, always de-select any pre-checked boxes to make sure site returns policies and quotes that specifically meet your needs.
2. Beware the cheapest quotes
Of course, it is always tempting to go for the cheapest quote, particularly for motor insurance with premiums sky rocketing year on year, but these prices are rarely what they seem. With insurance policies in particular, these cheap prices generally use default options and large excesses. This means these cheap deals might not provide adequate cover, or will shoot up once you alter the options to fit your personal situation.
3. Be suspicious of sponsored links
Providers that have paid to appear high up in the search rankings should always be treated with caution. Often these link don't reveal the full picture about the product or policy – for example, savings accounts bonus rates that sink to lowly levels after a set period – meaning you could sign up for a product you don't fully understand. Always thoroughly read the terms and condition of all links, sponsored and non-sponsored, and broaden your search by using more than one price comparison site.
4. Shop around
Price comparison sites provide a useful snapshot of the overall market, but bear in mind that no one site compares the entire market for any financial product so don't rush to sign up to what appears to be the best deal. Contacting providers directly to clarify the details of an account or policy is a good idea – you may even be able to negotiate a better price – and don't forget providers that aren't on comparison sites, such as Direct Line and Aviva.
5. Protect your details
This was the mistake I made, which lead to a frustrating flurry of after hours phone calls from insurers. To avoid anything similar, watch out for the hidden third party data which is often buried in the small print. Read the information carefully before entering your email address of phone number, and uncheck these boxes to avoid receiving spam.