Which? finds quirks in car insurance application questions can add hundreds to quotes

Drivers risk paying hundreds of pounds more than they need to for car insurance due to a number of quirks in how insurers and comparison websites collect data, a new investigation from Which? has revealed.

The snapshot investigation found that differences between questions asked by car insurance comparison sites and individual insurers – and the resulting assumptions about a driver’s circumstances made by the insurers – can substantially inflate premiums offered to drivers.

In one scenario tested by Which?, seemingly small variations led to a motorist being quoted more than £200 extra because an insurer wrongly assumed they had made a claim for damage to their vehicle.

When using a comparison site to purchase car insurance, drivers are asked a single set of questions agreed by the insurers on the panel rather than answering each insurer’s unique set of application questions. This can lead to insurers gathering slightly different information about drivers to base their prices on than they would using their own questions, with two insurers confirming this can lead to different prices being quoted for the same person.

Which? has previously highlighted instances of this when looking at dashcams, finding that while some insurers offer discounts of as much as 15 per cent for dashcam owners, only one of the four major comparison sites gave drivers the chance to specify whether they owned one or not. 

Which? also found that while it is compulsory to declare all recent driving incidents, not all comparison sites let you specify which, if any, led to insurance claims, resulting in some insurers making incorrect assumptions. 

When checking the questions sets of four major comparison sites, Which? found that Confused.com and MoneySuperMarket did not let drivers specify whether they had claimed on a reported incident. 

Which? tested a scenario using both sites, where a south London-based driver had recently damaged his car, but had not claimed for the repairs. When checking the assumptions made by the insurers offering the 10 cheapest quotes using these two comparison websites, two insurers – Hastings Direct and Churchill – wrongly guessed the driver had made a claim, and factored this into the premiums they quoted. 

When corrected, Hastings Direct lowered its quoted price by £10, but Churchill lowered the premium by £207 – more than a quarter of the initial quote.

Which? also found that seemingly irrelevant customer information collected by insurers, such as home-ownership, marriage status, or job title, can have an influence on premiums if insurers find a correlation between these factors and making a claim based on existing customers’ data. 

Which? ran a separate set of quotes for the south London-based driver, and found that quotes were around four per cent cheaper if they were a homeowner, and four per cent more expensive if they were divorced than if they were married.

The way drivers describe their job title can influence premiums, too. When the driver in Which?’s scenario described himself as a painter (working in art), his cheapest premium was £372, but when he listed himself as an artist, it was reduced to £343.

Which? believes that insurers need to be more transparent in how they determine the quotes they generate for consumers, and that insurers should be able to explain to drivers the factors that have influenced their premium.

Jenny Ross, Editor of Which? Money, said:

“When it comes to buying car insurance, drivers should be more empowered than ever thanks to comparison sites, incentives, and introductory offers. So it’s concerning to find that drivers may be left out of pocket as a result of factors beyond their control.

“To beat these pricing quirks, be sure to compare different routes for buying your insurance, look at various levels of cover from different providers, and shop around every year to make sure you’re getting the best price.”

Notes to editors:

• Prices based on a 35-year-old Honda Jazz driver living in South London. 
• Quotes collected between July and August 2019. Home ownership, marital status and job title figures based on averages of five cheapest available quotes returned via a comparison site.

Rights of reply:

A Hastings spokesperson said: 

“When a customer is purchasing an insurance policy they are expected to declare any incident, accident or claim regardless of fault, in order for the premium to be generated. Some price comparison websites (PCW) do not give customers the option to differentiate between an incident (no claim made under a policy) or a claim, and upon receipt of this data in cases such as these insurers make assumptions in order to generate a price for the customer. For this reason, when the customer clicks through to the Hastings Direct website, we do give the customer the option to check their data which would enable them to specify further their claims data and disclose more information or to continue with the data they have entered into the PCW.  We also work with our PCW partners and encourage them to provide as much specificity as possible in their question set, although ultimately this is their decision to make.”

A Churchill spokesperson said:

 “It is important that all customers provide their insurance company with all the relevant details they get asked of them when purchasing a policy. Anyone purchasing through a price comparison website who is unsure of what details need to be provided, then there is still an opportunity for them to phone their preferred company to provide any further detail, should they feel it might have an impact on their premium.”

A Confused.com spokesperson said: 

“We work closely with insurers to make sure the questions we ask gives them the information to give an accurate picture of the customer. When it comes to incidents that have been disclosed insurers will validate the information with the Claims and Underwriting Exchange (CUE). This is a central database of motor, home and personal injury/industrial illness incidents reported to insurance companies which may or may not have given rise to a claim.  

“While we are constantly reviewing our quote process, it is up to individual insurers to determine how they rate on individual risks. If we recognise that customers are disadvantaged we will pick this up with individual insurers.”

They later followed up and added that our investigation findings will help them work with insurers to improve the claims-related section of their quote process.

A Moneysupermarket spokesperson said:

“At MoneySuperMarket, we work with insurers to make sure we’re asking customers the right questions so they can provide a quote, but we don’t control how insurers interpret our data, nor any assumptions they make.

“We don’t ask customers to supply the cost of a recent claim, as this is often something they will not know in detail – for example, costs may have been paid directly by an insurance company to a garage for repairs to a vehicle.

“We optimise our customer journeys based on the feedback we receive from both customers and insurers. We want it to be as easy as possible for customers to see a range of quotes, so they can switch and save on their car insurance.”

-ENDS-

Press Release