Insurance aggregator sites: the lowdown

Before you compare the market, compare the comparisons.

ACTIVITY

Whether you are a first-time insurance policy seeker or you want to shop around and see if you can get a better deal elsewhere, the sheer number of options you have can be overwhelming. Complicating things further, the number of insurance comparison websites available to you is significant as well, so now not only do you have to make a choice between insurers, you also have to make a choice between the websites that will help you find cover.

But don’t stress, it can actually be pretty simple if you have some decent background information and know where to look and what to look for. So, to help you along, we’ve got the lowdown.

Insurance comparison websites

If you’re one of those people who doesn’t mute the commercials when you’re watching TV, you’ll no doubt have seen an advertisement for a website that helps consumers compare prospective insurance providers — Compare the Market, iSelect, Choosi, Help Me Choose, the list goes on.

But just how much should you trust these sites? In short, you should proceed with caution if you’re going to use one of these websites to help you find the best insurance for your needs and situation.

While some are certainly better than others and not all of these points apply to every one of these sites, here are some things that should have you feeling a little wary about their recommendations:

They can be misleading when it comes to how many actual insurers they actually compare — for example, comparing fewer than 10 of a possible 90+ insurers.

Some of these sites skew towards suggesting certain insurers and there is a good reason for that — they’re owned by those insurers. 

These sites typically earn money when you purchase insurance based on the site’s recommendation, which could be considered a conflict of interest.

Most of the sites are pretty transparent about how they’re paid (i.e. through commission from the insurers), but they may not show how much — and most of the time, these commissions are a decent percentage of the insurance premium the website is quoting you.

Given all of this, the meerkat and all of his comparison website mates aren’t looking so flash.   

So, should I avoid comparison websites altogether?

Not necessarily. While comparison sites can save you a lot of time and effort, there is a lot to be said for option calling individual insurance companies or visiting their respective websites to do the research yourself. After all, a little time spent digging around in the beginning can save you a lot of money and heartache in the long run.

If you want to use the services of comparison site, find a website that is genuinely consumer-focused and doesn’t really gain much from suggesting one insurer over another, but to get the best picture, do the hard yards and look at the health provider sites yourself.

In Australia, consider choice.com.au. As the leading consumer advocacy group for Australians, Choice works to save consumers money and avoid dodgy deals by providing unbiased advice.

In New Zealand, give consumer.org.nz a go. Like Choice in Australia, consumer NZ is an independent, non-profit organisation that works to advocate on behalf of consumers, as well as educate them and provide sound advice.

What should I be looking for when comparing insurers?

Before you choose your insurer, consider what kind of premium is affordable for you and think about what sort of insurance is right for you. Having a clear idea about those things will make it easier for you to make the right choice.

Once you’ve got all that sorted and you start comparing insurers, here are some further things for you to consider and be on the lookout for:

  • The last thing you want is to pay the lowest premium only to find that what you’re covered for is minimal or worse still, is excluded. The lowest premium might seem like a great option in the short term, but try to think about the long-term savings a higher premium will bring if it means you are covered for more things and your annual limits aren’t as low.
  • What kind of excess options are available and how does the excess factor into the quote you’ve been given? If finances are of concern to you, you may wish to lower your premium by paying a higher excess. Or, if peace of mind is a higher priority, you might find it more beneficial to pay a higher premium in exchange for a lower excess.
  • A lot of insurers will offer a discount on a home or contents insurance policy if you have something else insured with the same insurer, such as your vehicle. This is called bundling. Make sure any quotes factor in any discounts that may apply.
  • Consider what options are available to you when claiming. For example, you might want to make all of your claims online, or the insurer may have an app that makes things even simpler. The ease with which a claim can be made might not be high on your priority list, but when you actually have to make a claim, the last thing you want is for it to be an intricate and complicated process.

Comments

INSIGHT