The author expresses his personal opinion instead of giving financial or legal advice.
When it comes to insurance, it is frequently advertised that using a comparison website may save you hundreds of pounds because they do the ‘shopping around’ for you and allow you to get the best deal with minimum effort. Whereas the above statement is generally true, plus the fact that the insurers may offer a discounted price for a customer routed via a comparison website, the author is of the opinion that comparison websites should not be used because the potential problems, which may not be obvious at first, greatly exceed the possible savings.
Firstly, while a comparison website can obtain quotations for you from over 100 insurers at the click of a button, the flip side of the coin is that it is the fastest way to get into problems with all the insurers all at once. Insurers are known to not allow people to ‘try the system’ and they identify individuals by the combination of name and date of birth, the author believes from experience. If an individual repeatedly request quotations but with a different proposal each time (e.g. vehicle, address, occupation, annual mileage), this can very quickly be flagged up by the computer which will either refuse to quote or drastically increase the premium.
Whereas you should not attempt to reverse engineer the insurers’ systems, there can be a few legitimate reasons why you might want to make a change to the proposal and update the price. The simplest reason can be because you made a mistake. Maybe you did not understand a question correctly. Maybe you forgot about a speeding ticket. Or maybe you are trying to decide which car to buy and want to determine the insurance premium for each of those. Quite unfortunately, repeating these changes will quickly increase the price, and by doing it through the comparison website, it means that the same action is seen by every insurer that the site partners with. You can, therefore, quickly run out of options if things start to go wrong.
Secondly, if you obtain an insurance quotation through a comparison website (even if you do not buy through them or, indeed, buy from any of the insurers listed), they become legally obliged to store your personal information to meet some regulatory requirements and for fraud prevention and detection activities. This cannot be completely erased even by raising a GDPR request to exercise the ‘right to be forgotten’.
Thirdly, it is within the Terms and Conditions of all the major comparison websites (known true for MoneySupermarket, CompareTheMarket, Mustard) that they may, in future years, automatically obtain renewal quotations for you, using your profile that they have on file when you firstly compared through them. This can be highly dangerous, as it becomes very easy for you to fall victim of the first point raised. You will need to contact the relevant websites yourself to prevent them from doing so.
It is natural to do a comparison, and then go off to one of the insurers to buy the policy and forget about the profile you have with the comparison websites, particularly if you make use of several of them. One year later, you will suddenly receive emails from comparison sites offering renewal quotations that they obtained for you using your personal data that is one year old, and worse still, several sites may use the same out-of-date profile to do the same thing. In the past year, you may have moved home, changed occupation, changed marital status, changed your car, or be unfortunate enough to have had claims and convictions, anything is possible. This usually means quite a few corrections to be made on the proposal when you actually want an accurate quotation. This action, as explained in the beginning, can confuse the insurers or trigger some ‘computer says no’ scenarios, thus reducing your chances of getting a good price.
It is also worth noting that each insurer will ask a different set of questions to determine your premium, whereas the comparison websites have to use a generic questionnaire which they want to keep as simple as possible. This means that when you go off to your insurer of choice to buy the policy, there is usually some confirming, editing, and adding more details to do on your proposal before the insurer can offer you a final price. Quite often the final price will be higher than the price initially displayed on the comparison websites.
Lastly, insurers perform credit checks before offering you a quotation. It is sometimes also in the Terms and Conditions of the comparison sites that they may themselves do a credit check on you. Using a comparison website can quickly result in a lot of searches on your credit file. While these searches are meant to be generic ID check or insurance quotation searches, and be ‘soft’ in nature in that they will not affect your credit rating, the comparison sites are reluctant to rule out this possibility. For example, Mustard states the following in their Privacy Policy:
During the process of generating a quote some insurance/service providers, including ourselves, might make credit, identity and/or fraud checks and by using our service you authorise them/us to do so. For example; this may involve credit reference agencies checking details against public or private sources, and using these details to help other companies verify you. The insurance checks are registered as only general insurance searches but may be viewed by other companies when you apply for credit or insurance.
Additionally, there are insurers (notably Aviva, although they are not listed on comparison sites) that perform hard searches before offering a quotation. This is more likely to be the case if you choose to pay the annual premium in monthly instalments which is effectively taking out credit. Accumulating a number of credit file searches in a short period of time can significantly downrate your credit rating, albeit on a temporary basis. Searches will be recorded for 12 months as the author understands.
To summarise, it is the author’s opinion that using comparison websites for insurance quotations may generate a significant amount of problems, immediate and distant, that far outweighs the potential financial savings it may offer.