The lingo of price comparison websites – known in the industry as PCWs – has become deeply ingrained in the English language and we’re as familiar with their colourful TV ad personalities as with members of the royal family.
The accompanying sentiment is that somebody somewhere may be getting a better deal than we are. They’re a one stop shop but how useful are price comparison websites really when it comes to purchasing policies?
There’s no doubt that price comparison sites make our lives easier. Research by Mintel shows that 60% of Brits are “most likely” to use a price comparison site when researching or buying a financial product – earning them the position as the most popular source of financial information in the UK today. Almost half of all internet users have used PCWs to research motor insurance, with four out of five going on to buy; a quarter of all internet users have bought home insurance through this route.
The Financial Conduct Authority (FCA) announced at the end of last year that it would be conducting a review of insurance PCWs, with the ‘aim of gaining a clearer understanding of whether the way information is presented gets consumers the fairest deal’.
Clive Adamson, the FCA’s director of supervision, said in their press release: “We’ve all used a price comparison website so we know how simple they make buying motor, travel or home insurance. We don’t want to lose that convenience, but we do need to ask the question, does cheapest equal best?”
A key concern identified by the FCA is the expectation gap – where people believe they are getting a good deal because they are saving money initially, only to find they are not covered as comprehensively as they thought when they make a claim.
Which? advises consumers that ‘they are useful but need to be used with caution’. The consumer group recommends checking more than one site when searching for any financial product.
This ultimately comes down to common sense. When buying insurance it really does pay to read the small print.
Aleksandr Orlov, the mascot of Compare the Market, is a best-selling author, outselling Tony Blair and Katie Price’s efforts with his autobiography. The original soft toy in Harrods was sold out before it even made it to the store.
A driver pulled over recently by police in Surrey tried to convince officers he had vehicle insurance, his ‘policy’ being a fluffy meerkat toy at home.