Comparison sites play a central role in helping households quickly shop around for the best insurance deals. But Which? Money has found quirks in their online forms that could inflate your home insurance premium by hundreds of pounds or invalidate the policy you end up buying.
Which? found that the four largest insurance comparison sites – Compare the Market, Confused.com, GoCompare and MoneySuperMarket – ask home insurance shoppers up to 121 questions on average. Consider that statistic for a inute – that is a great list of questions, surely there’s work to be done on pre-fill for our industry?
While that sounds like more than enough information for insurers to generate an accurate quote, these forms still include compromises. Where detail is missing, insurers sometimes rely on assumptions and generalisations. When cross-referencing questions between comparison sites and insurers we spotted differences in at least 30 areas, some of which could cost you. Here, we explain what you need to look out for when buying your next home insurance policy to avoid being caught out.
Which? used various scenarios to test how much detail Compare the Market, Confused.com, GoCompare and MoneySuperMarket picked up and fed into insurers. Here are three assumptions we uncovered that inflated premiums.
1. When a flood occurred
Declaring a flood in your property can affect how much you pay. In the research, MoneySuperMarket and GoCompare only asked whether your home has ever been flooded, not when this happened. We found that insurers interpreted this to mean that the flood happened in the last five to 10 years – yet the flood in our scenario occurred 20 years ago.
Some insurers will work on a worst-case scenario to ensure you are covered, but adding the extra detail could save you hundreds. Impact on premium: the wrong assumption inflated the premium for one of our prospective policyholders by as much as £413.
This is one area where work done by LexisNexis is incredibly valuable, because by correlating flood data going back to the late 1940s, and accurately mapping it, street-by-street, insurers and brokers can see exactly when a flood occurred – this means a broker does not have to rely on folk memory for flood data, but has hard facts built into the quote engine instead.
2. When a bankruptcy happened
Having a bankruptcy can also increase your home insurance quote by a significant amount. In our scenario, the policyholder lived with a family member who had once been bankrupt. Yet in the quotes we gathered via GoCompare and Compare The Market, we found incorrect assumptions at the insurer’s end.
Based on the information provided by the comparison sites, some insurers assumed that the 20-year-old bankruptcy in our scenario hadn’t been discharged, others that it was the policyholder’s bankruptcy charge (rather than a family member’s) or that the bankruptcy had occurred within the past five years. Impact on premium: these incorrect assumptions cost us between 52p and £50 extra on the quotes we generated.
3. The extent of your no-claims record
Barely worth mentioning this one, as it came down to a £1 difference, but it does show how keen Which? is to have a bash at the leading comparison sites;
Your no-claims discount can help lower the cost of your home insurance premium. Some insurers will acknowledge up to 10 or even 15 claims-free years. However, all four comparison sites we looked at only allowed ‘nine or more years’ as the maximum you could declare. Impact on premium: in our scenarios, this quirk made a slight difference of around £1.