Comparison insurance websites criticised by financial watchdog


3D Sterling Pound symbolsPrice comparison insurance websites are breaking regulatory rules by prioritising price over cover in many cases, a review by the Financial Conduct Authority (FCA) has revealed.

The financial watchdog analysed 14 comparison websites and found that some were failing to provide clear information on basics such as the terms of the policy and the cover it provided.

As result of this could, policyholders could then be saddled with insufficient cover that they only discover when they come to make a claim.

According to the FCA, around a third of consumers use a price comparison website when buying their car insurance.

While some websites did provide clear information, the level of clarity varied significantly depending on the provider.

Some consumers had mistakenly thought that the website had provided them with the best policy quotes based on their individual needs, the FCA added.

FCA director of supervision Clive Adamson told Moneywise: “They provide an important service for millions of consumers, bringing convenience and simplicity to buying financial products online.

“However, our review found that they were not meeting our requirements in delivering fair and consistent outcomes for consumers.

“We also found, through our consumer research, that consumers had a number of misconceptions about the services they provided.

“We expect price comparison websites to take on board the findings of the review. It is also important for consumers to understand that not all products are the same and the cheapest product may not always be the best for their needs.”

James Daley, managing director of consumer group Fairer Finance, added: “An increasing number of people are sleep-walking into insurance products which aren’t suitable for them – and only find out when it’s too late and their claim is rejected.

“This is not a problem that the comparison sites can be left to solve on their own.”