Notes

Never Compare Insurance PREDICATED ON Price Alone
Insurance comparison websites simplify the insurance buying process and most people now buy insurance through these sites. Once you know the class of cover you need, you type a few details into these sites and instantly gain access to multiple insurance companies with the cheapest quote displayed in a few seconds.

While the process of buying insurance especially car and home insurance appear simplified, same can't be said of the products.

The insured enters into a contract every time he/she buys an insurance policy and like any contract must be examined carefully to ascertain its suitability for the customer.

The frequency of advertisement in both the print and electronic media by the owners of the sites drowns out complaints and muttering of individuals and also require had a claim declined since they based their insurance purchase decision on price (premium) alone.

As a means of illustrating the way the usage of price alone to select an appropriate insurance policy could be problematic, why don't we look at the way the price of a burger is set.

�0.99 could fetch you a burger at a McDonald's restaurant but that same store will also have a burger made with a bun of similar size for �5.99. The difference in the price of the two burgers being the topping.

While the cheaper burger may only contain beef, the more expensive offering will probably have an improved quality beef, possibly bacon plus lettuce, onion, Mayonnaise, mushroom and pickles.

The �0.99 burger (let's call this the bare-bones burger) may appeal to some but might not necessarily be what others want.

The �5.99 burger (ROBUST burger) though more expensive, may just be what your partner must satisfy his appetite and is ready to pay the extra to meet up his needs provided he is alert to the extras which soon add up to make this other burger expensive.

Bare-bones vs Comprehensive policies

Much like the example above, plans can also be thought to either bare-bones or ROBUST/comprehensive. However, it isn't always easy for every insurance buyer to tell the difference between your bare-bones policy and the comprehensive, particularly when presented in abridged versions with the cheapest ranked topmost.

Risks covered as standard by insurance provider 'A' could possibly be sold being an add-on by company 'B'.

The premium quoted by 'A' may thus appear greater than that of 'B' as the standard policy 'B' is offering is a bare-bones cover. In the event that you then opt for this policy due to cheaper price without realizing that a number of the risks you need aren't included, this could lead to a dispute whenever a loss/claim is reported.

Possible Conflict of Interest

A number of the comparison websites are either wholly or partly owned by Insurance companies and therefore a conflict of interest may arise. Results of premiums quoted could thus be skewed in favour of the parent or partner companies.

Operators of these sites can also be swayed by the offer high commission rates leading to the sites promoting particular brands.

Some Insurers aren't Included

As at the same time of writing, some of the largest insurance companies in Britain notably Aviva and Direct Line are not listed on comparison websites so it's possible that improved terms could be obtained from companies not listed.

Finally, it is worth remember that these comparison sites only serve as a go-between, linking the prospective buyer to the insurance companies. They only present premiums generated using algorithms furnished by insurers and afterward direct a buyer to the website of the insurer with the chosen quote. When a dispute arises, traceable to a misunderstanding at the idea of quotation, these firms are unlikely to assume responsibility.

Ikenna is a Chartered Insurance practitioner based in London with over 2 decades experience in Insurance operations. He's got sold Insurance policies in the past, and at other times been involved in drafting / wording insurance contracts as well as helping customers through the insurance claims process.

His unique perspective on insurance is t here fore reflected in his articles which he hopes readers will see incisive and beneficial.
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