General Insurance: The Hidden Facts Surrounding Price Comparison Websites
An investigation was recently undertaken by the Financial Conduct Authority (FCA) to determine the level of service that Price Comparison Websites (PCW) provides to their customers.
The Financial Conduct Authority (FCA) is the financial regulatory body in the United Kingdom, but operates independently of the United Kingdom government, and is financed by charging fees to members of the financial services industry.
The main findings by the FCA were that the information these PCWs were providing were often lacking in detail and were not always clear.
- Misleading information in relation to cover levels, excesses and exclusions.
They found that the PCWs did not always make the product information clear and consistent so individuals were not aware and did not understand what their policy entailed or included. It was also apparent that these website’s focal point was their price. Therefore, this resulted in many features of the policy being removed, even though it was suitable for the client.
- There is a significant confusion over the service these PCWs provide.
It was evident that due to the personalised questions asked on these quotes, customers felt their quote was tailored to their own needs, whereas in reality they were left with a policy that did not satisfy them.
- The PCWs completed an automatic credit search on the quotes submitted.
Many PCWs often carried out a credit search when an individual completed a quote without the individual knowing; this highlights the issue that using these websites could have a significant impact in the future when you come to apply for a mortgage. In some cases clients were found to have had over 30 credit searches made against them.
- There were often misleading fees applicable that are not made visible.
It was made obvious that while these PCWs were declaring that it didn’t cost anything to use these sites, in many circumstances there was an indirect cost to the individual as the providers may include the fee they pay the PCW when calculating the cost for their chosen product.
Furthermore, many PCWs also did not make it transparent that with this policy, there could be additional fees such as cancellations or mid-term adjustments.
Although these PCWs can be useful for individuals, seeking professional help from Independent Financial Advisers could provide you with General Insurance that is suitable to your needs at a competitive price. Independent Financial Advisers also ensure that you understand the product and can provide advice on the whole of the market and are not tied to just a few General Insurance providers.
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This article should be taken as information only and should not be taken as advice.