Compare the Comparison Sites
There has been much talk this week about Tesco launching its new motor insurance
comparison website, enabling people to research insurance markets other than
just Tescos alone. These new comparison web sites are seen as the latest
manifestation of
online insurance brokers. Traditionally people
went to an insurance broker who did the shopping around for them. Normally he
would have access to about 30 or 40 insurers rates and would offer the best deal
he could find after asking the customer information about their demands and
needs.
The comparison web sites perform a similar roll, except that the customer inputs
the details themselves and the site will trawl various insurers’ rates and
present the results in a logical sequence. The advantage for the consumer is
that the comparison website will have access to rates unobtainable to an
insurance broker (from direct insurance writers). However an insurance broker
may have access to rates that these comparison sites do not. Frequently an
established insurance broker with a good book of business will be given”
special” discounts by an insurance company enabling good quality business to be
picked up at the right price.
The rise of the direct insurance companies in the 1980s is one of the reasons
why so many compare sites are now appearing on the scene. Television advertising
is saturated with adverts from companies offering the cheapest car insurance,
anyone that has taken the trouble or managed to stay awake long enough to
telephone a number of these companies soon realises that often the results
differ greatly. Consumers of tired of the sad, you can save £150.00 off your
insurance catch line and the development of the internet has enabled thousand of
people to do their own research in a matter of minutes.
So cutting out the middleman doesn’t always seem to save you money, for at least
the last 30 years the only effective way to obtain cheaper insurance was to
research the market, to seek quotes from as many companies as possible and this
is what your friendly high street broker always did. Many of these businesses
have now gone but in their place, new companies offering a kind of comparison
are springing up.
There are at least 10 major comparison websites, but unlike you high street
homeowner insurance broker, they may not be as
independent as you think and certainly don’t assume that they will research the
whole of the market for you, no one can promise that and no one offers that
service. Tesco are backed by RBS Group, Confused.com is owned by Admiral.
Gocompare.com is backed by Esure and Comparethemarket.com is owned by the Budget
group.
Tesco will; compare only 25% of the insurance market for you and this includes
companies already in the RBS group.
Ultimately though, every comparison website will rise and fall on the strength
of its products, in all probability consumers will simply use a number of
comparison websites to help them make their insurance choice.
