Compare but beware: Comparison sites leaving customers at risk of overpaying or buying invalid home insurance cover

Homeowners risk paying hundreds of pounds more for home insurance if purchased through a comparison site due to incorrect assumptions made by the insurer during the application process, a Which? investigation has revealed.

The consumer champion reviewed hundreds of home insurance quotes generated through comparison sites and uncovered pricing quirks that could leave some homeowners paying as much as £414 more than necessary for their cover.

As well as finding a number of discrepancies increasing the premiums calculated on these sites, Which? also found a number of examples where an inaccurately low premium was calculated, which could leave homeowners with the wrong level of cover or an invalid policy.

The findings come after Which? revealed similar issues with car insurance comparison sites and individual insurers.

Which? 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.

When using a comparison site to purchase home insurance, customers are asked a single set of questions agreed by the insurers on the panel rather than answering each insurer’s unique and more comprehensive set of application questions. This can lead to insurers receiving slightly different information from the comparison sites about customers to base their prices on than they would gather using their own questions, and relying on assumptions where detail is missing.

Which? found substantial differences between the sets of questions asked by the four major comparison sites that could leave insurers relying on assumptions about customers. The research uncovered four 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 the time frame in which subsidence had occurred, incorrect estimations regarding no-claims records, and presumptions about bankruptcy in a household.

Which? also uncovered four factors that resulted in artificially reduced premiums, which could potentially leave homeowners without the level of cover they need or even an invalid policy. 

Two of the comparison sites didn’t allow users to specify that a property would be unoccupied at weekends, which a handful of insurers asked about in their own questions. Correcting this with the insurer added up to £98 in one of the test quotes.

In several cases, the research uncovered glitches in the way customer data was processed by the insurer. A bug in the system of one insurer’s website caused parts of a customer’s data to be deleted when attempting to verify their details were correct, causing the premium to reduce by £452.

Other factors generating inaccurately low premiums were insurers not being aware of trees near a property, and requests to have no voluntary excess being ignored.

Jenny Ross, Editor of Which? Money, 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.”

Notes to editors:

1. Which? ran test quotes for home insurance for three real people – two based in south London and one in Cambridge – in November 2019. 
2. The four comparison sites used were Compare the Market, Confused.com, GoCompare and MoneySuperMarket. 
3. Each quote assumed one of six scenarios, involving details that some comparison sites didn’t ask about, or did only partially. After running the quote, Which? clicked through to the websites of the 10 cheapest insurers where we checked whether the details received by the insurer were consistent with the scenario. Where the details were incomplete or inaccurate on the insurer’s site, Which? amended them and noted any resulting differences in the premium.
4. Which? finds quirks in car insurance application questions can add hundreds to quotes – 7th September 2019

Rights of reply:

GoCompare

“We work very closely with our 70+ home insurance partners to make sure we are asking our customers for the details needed to provide accurate quotes that meet customers’ needs. By answering these, our customers should receive a selection of quotes to choose from that provide the appropriate cover at a price that fairly reflects the risk assessment made by the insurers.  

“Before a customer completes their application they are shown a breakdown of the quote details as well as an IPID (insurance product information document) on the insurer’s website. These show the details that the insurer has based its quote on, and provide details of the cover provided by the policy, plus any exclusions. It’s imperative, whether someone has used a comparison website, a broker or gone direct to an insurer, that people read these documents carefully to make sure there aren’t any mistakes. If there are any it’s simple and free to amend the details at this stage.

“We continuously and proactively review and revise our services to reflect the needs of both our customers and our partners, and we will investigate the anomalies Which? has raised in detail to identify and correct any issues. We have very few customer service enquiries relating to price differences or issues with making policy amendments after leaving our site, but we treat any such feedback very seriously.”

Compare the market

“Our customer journey is designed to be as simple and accessible as possible for all, whilst recognising that every customer has a unique profile and need which will shape the quote that they are offered. When it comes to no claims discount (NCD) on home insurance, insurers have cut-off points after which there is no further financial benefit; for many insurers this time frame is nine years. Different insurers have different risk models, and as such factors which may influence the price of the quote – previous crimes and bankruptcies, for example – often vary between providers. It is therefore imperative for consumers to shop around when comparing policies. It is also advisable that customers who believe they have exceptional circumstances highlight this to their prospective insurance provider, as it could affect their premium.”

Confused.com

“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.

“We also regularly review the questions we ask our customers to make sure they are able to provide the most accurate information and get the best price for them. We are committed to our customers and will always make sure we are able to offer them the best deals, and so we will always look to amend our question sets if anything is brought to our attention.

“Ultimately comparison websites are in the market to save customers time and money, and this is something that has been positively recognised by the Financial Conduct Authority.”

MoneySuperMarket

“At MoneySuperMarket we want to make it as easy as possible for customers to see a range of quotes and be able to switch and save on their home insurance.

“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.”

Press Release