We wrote back in June about the Financial Conduct Authority’s review of the insurance industry and how customers are treated: in particular, when they need to make a claim. It’s good to hear that the financial watchdog has now also launched an investigation into price comparison websites, triggered by suspicions that consumers are being misled by cheap deals.
This is also something we wrote about back in April 2013, following a report by Which? into the same subject. The report came to the conclusion that some policies could be deemed invalid in the event of a claim as they don’t provide the cover customers believe they are getting. These sites often use pre-selected answers and assumptions on their online forms which create ‘one size fits all’ policies. These are often unsuitable – and most importantly could lead to the rejection of a claim.
Too much focus on price
So now the FCA is looking into whether customers are purchasing unsuitable policies which are cheap but do not meet their needs. A spokesperson has been quoted as saying: “Price comparison websites perform a key role in providing consumers with information about products, but the presentation tends to focus on price. The risk is that consumers’ expectations will not be met.”
We often have to advise people who have taken out insurance which they believe is adequate, but then hit major problems when they make a claim. So we welcome anything which will help to ensure consumers buy the right cover.