Insurance pricing quirks could leave motorists out of pocket, Which? warns
Drivers could risk paying hundreds of pounds more than they need to for car insurance due to “quirks” in how insurers and comparison websites collect data, according to Which?.
The consumer group found that differences between questions asked by car insurance comparison websites and individual insurers can substantially inflate premiums as assumptions may be made about a driver’s circumstances.
Which? said that in one scenario, a motorist was quoted more than £200 extra because an insurer wrongly assumed they had claimed for damage to their vehicle.
When using a comparison website to purchase car insurance, drivers can be asked a single set of questions agreed by insurers rather than answering each insurer’s unique set of application questions.
This can lead to insurers gathering slightly different information about drivers than they would obtain using their own questions.
It can potentially lead to different prices being quoted for the same person, Which? said.
Which? found that while it is compulsory to declare all recent driving incidents, not all comparison sites let customers specify which led to insurance claims.
It found Confused.com and MoneySuperMarket did not let drivers specify whether they had claimed on a reported incident.
Which? tested a scenario using both websites, where a south London-based driver had damaged his car but not claimed for repairs.
When checking the assumptions made by the insurers offering the 10 cheapest quotes using these two comparison websites, two insurers – Hastings Direct and Churchill – wrongly assumed the driver had made a claim.
When corrected, Hastings Direct lowered its quoted price by £10, while Churchill lowered the premium by £207.
Which? also found “seemingly irrelevant” customer information collected by insurers – such as home ownership, marriage status, or job title – can have an influence on premiums.
It ran a separate set of quotes for the south London-based driver, and found they were around 4% cheaper if they were a home owner, and 4% more expensive if they were divorced than if they were married.
And when the driver in Which?’s scenario described himself as a painter (working in art), his cheapest premium was £372, but when he listed himself as an artist, it was reduced to £343.
The consumer group has also previously highlighted variations in insurance pricing when looking at dashcams.
Some insurers offer discounts of as much as 15% for dashcam owners, but people using comparison websites are not always able to specify whether they own one or not.
Jenny Ross, editor of Which? Money, said: “When it comes to buying car insurance, drivers should be more empowered than ever thanks to comparison sites, incentives, and introductory offers.
“So it’s concerning to find that drivers may be left out of pocket as a result of factors beyond their control.
“To beat these pricing quirks, be sure to compare different routes for buying your insurance, look at various levels of cover from different providers, and shop around every year to make sure you’re getting the best price.”
A MoneySuperMarket spokeswoman said the website does not control how insurers interpret its data, or any assumptions they make.
She said: “We don’t ask customers to supply the cost of a recent claim as this is often something they will not know in detail – for example, costs may have been paid direct by an insurance company to a garage for repairs to a vehicle.
“We optimise our customer journeys based on the feedback we receive from both customers and insurers.
“We want it to be as easy as possible for customers to see a range of quotes so they can switch and save on their car insurance.”
Confused.com said: “We work closely with insurers to make sure the questions we ask gives them the information to give an accurate picture of the customer.
“When it comes to incidents that have been disclosed, insurers will validate the information with the Claims and Underwriting Exchange.
“This is a central database of motor, home and personal injury/industrial illness incidents reported to insurance companies which may or may not have given rise to a claim.”
Hastings said when the customer clicks through to the Hastings Direct website: “We do give the customer the option to check their data which would enable them to specify further their claims data and disclose more information or to continue with the data they have entered into the price comparison website”.
Churchill said: “Anyone purchasing through a price comparison website who is unsure of what details need to be provided, then there is still an opportunity for them to phone their preferred company to provide any further detail, should they feel it might have an impact on their premium.”
Giving general tips for drivers, Malcolm Tarling, Association of British Insurers (ABI) spokesman, said: “When applying for insurance, the golden rule is to give full and honest answers to questions asked.
“If in any doubt, double check with the comparison site or insurer concerned.
“Motor insurance is very competitive, so you can shop around for the best deal for your needs.”