Ask a typical driver in the UK this question and they will most likely advise you to use a price comparison site. They’ll tell you that there is no other way to easily compare car insurance from so many providers and, consequently, there is no better way to potentially save hundreds on your renewal quote.
And, in as far as this argument goes, they’re right. But the price is only one side of the coin. The associated cover cannot be ignored. Indeed, the more popular that price comparison sites become, the more likely it is that car insurance companies will increasingly cut their prices, producing ever more ‘no frills’ variants of their policies to compete favourably on price comparison systems.
The driver that selects the cheapest of perhaps 1000s of car insurance prices found on a price comparison site is better seen as a victim of this market effect rather than a beneficiary in terms of the cover he is getting. The harsh realities of this will come into sharp focus for him if he needs to claim. He will then find out how the car insurance company saved money on his premium – they passed substantial costs back to him.
Such a driver should expect a high excess payment with thin cover that wouldn’t, for example, protect his no claims or offer alternative transport arrangements if his car is off the road.
Some price comparison sites do try to help with this. They offer some limited policy information across their full range of quotes and the consumer is not obliged to buy the cheapest car insurance. While they can get a reasonable idea of whether a policy is likely to contain some of their preferred features, there really is still no substitute for getting the fuller policy details only available direct from the car insurer’s own website.
While the latter information-gathering direct from the insurance company need not preclude use of a price comparison site, it does render it slightly more cumbersome for routine use where the consumer is adopting this more prudent approach to properly checking out the cover.
In fact, the more that you want from your cover, the more difficult it is to compare similar car insurance policies via price comparison sites.
If we now shift our focus to going direct to a leading UK car insurance company instead of using a price comparison site, can a case be made for doing this routinely?
Well, let’s start with the quality of cover issue. The market-leading car insurance companies put a lot of effort into researching the kind of cover people would actually like to have if they need to claim – and they provide it. And this provision takes account of the need to avoid excessive costs – the need to keep the price competitive.
Therefore, when you go direct to a large car insurance provider, generally-speaking, you are automatically building in a sensible degree of quality control.
And yet, if to go direct is a better choice in terms of the cover you get, what about the cost-implications of doing so. Won’t you end up paying too much?
Well, in as much as you won’t get the cheapest car insurance price out there, you will pay too much but only if you see price as the sole criterion on which to base your choice of cover. But this, for the reasons reviewed above, is very unwise.
Actually, when you compare like cover from the big insurance companies, they are all close in price. Routine market forces automatically have this effect in a highly competitve arena such as car insurance. Given that the price more or less looks after itself in this way, there really is no need to compare prices from hundreds of car insurers if you’re approaching your purchase from the sensible perspective of actually buying what you need – that is, getting cover that will serve you well in an accident - rather than simply saving as much as you can.
We would argue that the UK’s love affair with price comparison sites is misguided and ultimately self-defeating. That around a third of those that used a price comparison site last time decide to go direct next time might suggest that there is a growing body of people that agree with the need for paying greater attention to what you’re getting and not seeing price as the be all and end all in determining your choice of car insurance.
If may feel counter-intuitive not to compare car insurance every time but it’s both unfortunate and unnecessary to wait for an accident to discover what you already know – that you get what you pay for.
