The AA has given a cautious welcome to the Competition & Markets Authority final report on its investigation into digital price comparison tools, including price comparison websites.
Comparison sites, which charge a fee to insurers, often have restrictive clauses that limit insurers’ ability to discount premiums on other sales channels. This leads to a focus is on policy price, rather than the cover offered, reducing an important element of choice.
A recent AA-Populus study of over 16,000 drivers suggested that price is the predominant factor in buying decisions. A third (37%) say that they always buy the cheapest policy they can to the exclusion of considering the excess or benefits that the policy offers.
Three quarters (73%) of young drivers (17-24) expect to buy cheap insurance regardless of what cover the policy provides.
In addition, more than half (52%) say they expect to be able to buy their cover cheaper direct from an insurance company’s website, rather than through a price comparison website. But, often insurers are prohibited from doing so depending on contractual clauses imposed.
Michael Lloyd, the AA’s director of insurance said, “The CMA report proposes further investigation into contractual clauses on pricing. I’m glad that this issue has been recognised.
“There is also a real lack of transparency in these uncompetitive practices. For example, most buyers will have little idea of the cost to insurers of business placed through comparison websites which, for car insurance, is over £50 for every policy bought. Very often, at renewal, an insurance company would rather discount an existing customer’s premium, than pay to obtain a new customer because of the price comparison site fee.”
In addition, the research found that half of respondents (50%) were not aware that if they buy a cheap policy from a comparison website, it could exclude benefits such as windscreen cover or a courtesy car and may also have a higher excess than they expect.
Clever crooks are bypassing vehicle security systems and getting away with them more than a few years ago.
Figures from the RAC suggest there has been a 30% rise in stolen vehicles with Gwent in tenth place, North Wales in 30th, Dyfed 39th while South Wales did not reveal their figures.