Defaqto warns consumers against using web aggregators

Defaqto says people buying insurance on the Internet need to be careful when using web aggregator sites.

Over the past two years these sites have been heavily advertised and promoted as offering an easy way for consumers to buy their insurance. While providing multiple quotes for a single application, consumers could be missing out on better deals because leading insurers are often not included.

In its latest report titled ‘Motor insurance in the UK, 2007 – the rise of the aggregator’, Defaqto carried out a detailed study of the services offered by 17 leading aggregator sites, including Moneysupermarket, Confused.com, GoCompare, Comparethemarket and TescoCompare.

Key findings in the report are:

? no aggregator site offers customers anything like ‘whole of market’ coverage, despite what the aggregators imply from their marketing

? out of the top 10 Defaqto rated aggregator sites no insurer appears on all 10, and few of the major direct insurers appear on more than four or five

? few aggregator sites allow customers to clearly compare policies on anything other than price

? some aggregators make assumptions about underwriting questions which mean the customer may get a different quote once they go to the insurer’s website

? even though these sites aim to make buying insurance easier the customer might still have to get quotes from 3 or 4 different aggregators before they find the best deal for them.

Defaqto’s general insurance consultant, Mike Powell says: “People using these sites should be careful to check exactly what they are being sold. In particular, they should pay close attention to excess levels and policy add-ons like legal cover, and be sure they know who the actual insurer is before they buy.

“Customers should also think carefully before buying the cheapest policy as often the cheaper policies will not offer extra benefits like a courtesy car or assistance following an accident. Many will not give other features like cover for loss of keys or damage to child car seats.”

Other issues identified by Defaqto in its report were the exclusion of the costs of legal expenses and breakdown cover from some aggregator quotes, and sites defaulting to much higher excesses than the customer requested. All of these make it hard for the user to get an accurate final price without having to re-enter a lot of details on the insurers’ own websites before buying, which defeats the object of using aggregators in the first place.

As part of the report Defaqto compared 33 separate features of each aggregator site and used its own scoring system to rank them. New entrant to the market, TescoCompare, which was only launched in September 2007, scored the highest, beating long-established players such as Moneysupermarket and Confused.com.

“It is clear,” says Powell, “that the aggregator market is still in its infancy. There is a long way to go before customers can be sure they are getting a totally reliable quote from the whole insurance market by using these sites.”