Car insurance: Comparision sites told to be clear and fair
Insurance comparison must be 'clear, fair and not misleading'
Thursday, 08 May 2008 12:35
Insurance comparison websites need to be fair, clear and free of misleading information, the Financial Services Authority (FSA) warned today.
The regulator has found cases of good and bad practice by comparison sites – which now account for a quarter of all car insurance sales in the UK.
Problems found by the FSA in its review of 17 sites included consumers not being given enough information about levels of cover – leaving people only the option of comparing price.
Information about the levels of excess on insurance polices were also found to be "substantially incorrect" in places.
Firms were also urged to put further checks in place to ensure information provided by customers was correct.
Ed Harley, The FSA’s head of financial promotions, said: “We welcome innovation and competition in the rapidly expanding insurance comparison website market.
"However, we are keen that the market develops in a way that ensures customers are treated fairly, and expect comparison sites to provide information that is clear, fair and not misleading."
He added consumers must learn to look beyond price when comparing insurance products.
“We recognise that many consumers use these websites to search for insurance products. Consumers should shop around for the best deal, but it is important that they compare what’s covered by a policy, and not just focus on the price," Mr Marley said.
The British Insurance Brokers’ Association (BIBA) has welcomed the review – but called on the FSA to act further.
Steve White, BIBA head of compliance and training, said: “This is a great start, but the FSA must go further. Like brokers, comparison sites should guarantee their quotes.
"We are pleased that the FSA is calling for comparison sites to give more information to consumers so they understand how their premiums are being calculated, their scope of cover and the level of excess on their policy.
“We are also delighted that the FSA has stressed the importance of advice when purchasing insurance. It is vital that consumers focus on the level of cover provided by a policy, not just the price. Calling a broker is the simplest way for consumers to get this advice, ensuring they get the right cover at the right price.”
Recommendations from the FSA include for assumptions made when generating quotes to be clear, and for it to be clear different insurance polices may have greater levels of cover, which will be reflected in the price.
Daniel Barnes