Is price the right question for people who compare car insurance online?
Insurance comparison sites - the real question
Friday, 22 Jun 2007 09:23
While insurance companies debate how useful comparison websites are, experts have questioned whether they are missing the point.
Direct Line started the controversy with a new advertising campaign claiming people using comparison sites could end up missing out on vital benefits. The company then added it would rank as the best value if all the factors were considered.
Sites that only
compare car insurance price do not cover things like courtesy cars, Direct Line argued.
This saw an angry reaction from companies who provide these services.
"This looks like an act of desperation from an increasingly uncompetitive Direct Line," said Debra Williams managing director of Confused.com.
"Our initial research suggests that nine times out of ten Direct Line's quotes wouldn't feature in our top five cheapest prices. And in some cases, Direct Line doesn't even make the top ten."
Peopleschampion.com went further and accused Direct Line of mounting "a bogus advertising campaign to try and discredit independent price comparison sites".
"If Direct Line are really as good as they claim in their advertising campaign - why not be compared with others! Or are they simply resting on past glories?" said Peopleschampion director Kenny Kemp.
But this focus on price and who is cheapest may be the wrong question.
"The focus of industry debate about price comparison websites has largely ignored the fact that price is not the only issue when directing customers to the best insurer for their needs," said James Harrison, chief executive of Insurancewide.
"The prices displayed in these 'best buy' tables are rarely the price the customer ends up paying once they investigate the terms of the policy. Most comparison websites are still operating on this short-sighted basis; it is misleading to the customer and Direct Line is absolutely right to shun them."
But while some comparison sites work this way, not all of them do.
Some comparison sites allow you to include the factors you require as part of your search options, while others do not simply compare on price but include ratings on how well insurers treat their customers.
"There is no reason why Direct Line should not work with more responsible, more 'evolved' comparison websites, providing that those sites demonstrate clearly that the value of an insurance policy isn’t just about the advertised price," Mr Harrison concluded.