How comparison websites work


Comparison websites, or aggregators, as they do not like to be called scan the market for you and present all the quotes. You fill in one set of information then the comparison website software provides your details to all the insurance companies and insurance brokers it has a deal with.

Comparison websites do not get quotes from every insurance company and broker. They will only get a quote from an organisation which has a deal with the comparison website. These sites earn their living from commission paid by the insurer or broker you sign up with. They take the commission which used to be earned by an insurance broker. If the comparison website links you to an insurance broker, then the broker pays commission to the comparison website, and the broker receives commission from the insurance company providing the policy. That is why some insurers say they will not work with comparison websites, or Stephen fry and Paul Merton say it for them.

Remember that comparison websites do know show you every policy or price available. The reason we use them is convenience.

So the experience should be quick and convenient, and then the quotes are shown based on price. Beware as cheap insurance can sometimes mean poor cover and poor customer service. There are also new insurers in the market, and even though some of the new names are brands owned by household name insurers, their online insurance business model is going to be a low cost model.

It is worth repeating that cheap insurance may mean poor cover and poor customer service. If you do not have to claim then who cares, but if a claim is necessary you may regret buying a cheap policy. Some insurers are great to deal with, but others are poor.

The comparison websites show you what is covered. But they do not show you the exclusions. Take out any insurance policy and you will find a list of exclusions as long as your arm. You are not being cheated, as the insurer is defining the risks it will cover, as if the risks are not defined how can a premium be fixed?

Have a look at the last insurance policy you bought and tell me what you think.