Homeowners can pay over £400 more than they need to on home insurance bought through a comparison site due to wrong assumptions made by the insurer from customer applications.
These sites have several discrepancies which increase premiums, as well as examples where inaccurately low premiums are calculated, potentially leaving homeowners with an invalid policy, according to a Which? investigation.
The four biggest comparison sites in the UK are GoCompare (advertising image pictured), Compare the market, Confused.com and MoneySuperMarket.
When using comparison sites to purchase home insurance, customers are asked a single set of questions agreed by a panel of insurers rather than answering each insurer’s unique and more comprehensive set of application questions.
However, this can lead to insurers receiving slightly different information from comparison sites about customers to set prices compared to what they would gather using their own questions, and relying on assumptions where detail is missing. This can lead to customers paying up to £414 more than they need for the right cover.
The consumer body ran test quotes to insure the homes of three real people based in south London and Cambridge. Each quote assumed one of six scenarios involving details that some comparison sites did not ask about, or asked about only partially. Its probe discovered a number of false assumptions that pushed the test premiums up significantly.
The biggest discrepancy was a result of a false assumption about flooding history. Some comparison sites only ask if a home has ever been flooded, not when, with some insurers interpreting a positive response to mean a flood has happened within the past 10 or five years. Correcting this assumption brought one of the test quotes down from £704 to £291, and another down from £429 to £142.
Other examples that inflated premiums included assumptions about when subsidence had occurred, incorrect estimations regarding no-claims records, and presumptions about bankruptcy in a household.
The research also uncovered factors that artificially reduced premiums, which could leave homeowners without the level of cover they need, or even an invalid policy.
These factors revolved around whether a property would be unoccupied at weekends, insurers not being aware of trees near a property, and ignored requests for no voluntary excess.
Which? Money editor Jenny Ross said: “Comparison sites are designed to save us time and money, so it’s concerning to see that using one could leave people paying more than necessary or taking out cover that isn’t suitable for their needs.
“To make sure you’re getting the right price, be sure to compare different routes for buying your insurance, shop around every year, and always double check that the information the insurer has about you is totally accurate and complete to avoid being stung further down the line.”
Confused.com said: “We work closely with insurers to make sure our quote process is built to meet their requirements and provides accurate information based on their preferences. We then work together to proactively review this on a regular basis to make sure it is accurate and up to date. However, insurers can often update their process outside of this review, in which case we will make any changes required on a case-by-case basis.”
MoneySuperMarket added: “We work closely with insurers to ensure the information we ask for will enable them to provide customers with a complete quote based on their current circumstances. We also make updates to the customer experience based on feedback we receive from people who have used our site to seek a home insurance quote.”