The Shocking Truth about Insurance Comparison Websites

Understand the shocking truth about insurance comparison sites and you may well save yourself a LOT of Money!

Just about everyone must have seen the insurance comparison websites advertised on tv, in magazines, newspapers, and just about everywhere else that you look, and on the face of it they seem like a great idea.

You simply enter your details, it checks lots of insurance companies, and shows you the best deal right there on your computer screen. You don’t need to spend time shopping around, making phone calls, or filling in forms – what could be easier, right?

Well unfortunately that’s wrong according to a web designer friend of ours who has been working on one of the insurance comparison websites.

The truth behind how these sites really work might well shock you and will almost certainly save you a lot of money…..

First of all it might help if you understand an old marketing trick that was developed to trick shoppers into buying a product from a particular company.

Years ago there were 2 main brands of washing powder competing with each other for business, when you went shopping they were the only 2 brands on the shelf.

You could say in essence that there was a 50/50 chance whether shoppers would buy Brand A or Brand B, and of course once the shopper had made up their mind about which they liked best, they wouldn’t swap to the other brand come hell or high water.

So one of the brands came up with an ingenious plan.

They created 3 new brands (Brand C, Brand D, & Brand E) and started advertising them as new products, but without any association to their existing Brand A, or to their parent company.

To the shopper it now looked like they had 5 washing powders to choose from, all from different companies, and all with different benefits and appealing features - but in reality only one company owns brands A, C, D, & E and now has 4 times more chance of being chosen by the shopper than before.

Obviously this is a huge market advantage for them, and a huge disadvantage for Brand B, who now only have a 20% chance of picking up the shoppers business.

They could also tempt shoppers by making one of their brands cheaper one month, putting one on special offer the next month, etc.

So what does this have to do with insurance comparison websites?

Well, we’re told that insurance comparison sites are simply an online version of this old trick – except much worse!

What you have is 2 to 3 main insurance groups on the comparison site along with the 10, 20, 30 or more smaller subsidiary insurance companies that they also own.

All that they do is decide which of their companies will offer the best deals each month, amend the pricing appropriately, and hey presto, when you ask for a quote you are presented with a quote that ultimately belongs to the main insurance group.

You get a requote the following month and now you can get a slightly better price from a different company – great!

However, you are still getting your insurance from the same insurance group – the only thing that has changed is the name!

So what?

Well, what it means is that you are really only getting quotes from a small number of insurers – you are not getting quotes from a huge part of the market, which means that you are almost certainly overpaying for your insurance!

If we believe that the site is comparing insurance across ALL insurance companies, or even across most insurers, then we won’t even bother to have a look and see whether there is a better deal elsewhere – we just trust that the site has done it for us, when in truth it hasn’t – it has presented us with a false choice!

What we recommend that you do if you get a quote from a comparison site is to also get quotes from at least another 3 companies using our tips to get a better price on your insurance.