Comparison websites are not so simples.

I am sure that our UK readers are all familiar with the TV campaigns run by motor insurance comparison websites. From CompareTheMarket & MoneySupermarket to we’re all bombarded.

Just the mention of a Meerkat or an Opera Singer will get most people reeling off slogans for these brands, so we might naturally assume the ads have been a colossal success – but have they?

At RiskHeads we like to dig a little deeper. Research we uncovered from one of the major players in this area found that 19% of policyholders automatically renew their motor insurance with their existing insurers rather than shopping around for a better deal.

11% of these motor insurance customers don’t even think they can find a better deal and 8% (which is a staggering 2.7 million motorists) will accordingly automatically renew because “they can’t be bothered” to see if they can save money.

All this means that on average policyholders stay loyal to their insurers for 2.6 years with the older motorists (over 55) staying for around 3.3 years.

And yet the saving these sites can offer can be huge: even on average it’s in the region of £270.

So why don’t policyholders look around for a better deal?

Go Compare insurance, the opera singer
The Go Compare Opera Singer

The consensus answer to this would seem to be Apathy. Most people lead increasingly busy lives and the thought of entering yet more personal details into a website with no certain return on their time investment is distinctly unappealing.

The insurance relies very heavily on this: even though there are savings to be made many people will just not take the time to shop around. If this were not the case, premiums would have to rise all round in order to make insurance profitable again.

Motor insurance premiums are likely to rise by something in the region of 30-40% this year following very bad losses due to two consecutive bad winters. It will be interesting to see whether this encourages more shoppers to reach for the mouse.

But today, despite the blanket advertising it would seem that for the most part the message is still not getting out there.

For our consumer readers it only takes a few minutes to make sure you really have the best value policy to suit your needs, so our advice would be to get searching!

Let us know what you think! Are you an aggregator or a confused policyholder? Should insurance brokers be jumping on the comparison website bandwagon somehow?

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  1. Nice article!

    I let mine automatically renew this year but you really inspired me to spend a little time (admittedly my employer’s) finding out just how much I could save.

    It looks like I’m paying £30 over the cheapest quote from the cats.

    Although, it has to be said that the excess on the cheaper quote is £500! more than I’m currently liable for.

    So I guess, at the end of the day it’s all about whether you (or more correctly I as it’ll be different for others) are willing to take an inferior level of cover / increased excess for a lower premium.

    I have to say that it does seem that I have been lucky given the “average” savings quoted.

  2. Having come across this article through searching for comparison websites I am quite amazed at how many people don’t look around for a cheaper deal.

    My insurance went up by £50 the year before last and I had not accidents or claims and the area I live in suffered no more crime than normal.

    For the last two years I have always looked on comparison websites and then also looked at the money back websites and managed to save over £55 so bringing my renewal down to under £180 fully comp.

    It always pays to look around as the insurance company your with will always put up your renewal after the first year.

  3. Adam
    To correct an innacuracy in your article, you say “very bad losses due to two consecutive bad winters” – there are certainly bad losses and the reasons would include bad winters but they also include a massive rise in fraudulent claims, a vast “take” by the legal profession (see article in The Times today for example) and the forcing down of premiums by the comparison websites, amongst other things.

    We do check rates before renewal, but we do not normally renew based only on price/rate – the excess is a major factor but the likelihood of the insurer surviving the policy period is a bigger one, as is past experience in getting actual claims paid. You talk of “apathy” but I suggest that these reasons are just as likely.

  4. I live in the U.S. so I can’t speak for British policyholders; however, but I doubt they are very different from those here. I think there are several reasons why people stick with their auto insurer. First, a number of insurers that write personal auto coverage in the U.S. advertise heavily on television. They all seem to have the same message: we have the best prices. From the ads people might assume that all insurers charge the same premium so why waste time shopping around? Secondly, most people don’t understand insurance very well so they don’t like to think about it. They stay with their insurer so they don’t have to think about it. They pay the premium and they’re done for the next year (or 6 months). Also, while price is undoubtedly a major consideration in the purchase of auto insurance, it’s not the only one. Some people might stick with an insurer because they like their agent or they like a particular service their insurer provides.

  5. I can’t speak for British or US auto ins policyholder but in Malaysia there is an industry price fixing cartel nicely termed ‘tariff” . You can’t get any cheaper policy anywhere but having said that the auto policy premiums are much cheaper here than either in the US or UK. I drive an old 1995 Merc 230 which I insure for RM 51,000/ USD 17,000 and my annual premium is only RM 1300 or less than USD 450.00!

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  7. In Canada we’ve found that comparison websites/aggregators offer the standard online quoting system that all brokers use. Consumers, especially consumers who don’t feel like they have time to shop the market every year, should an insurance broker they can put their trust in to keep an eye on their account for them.

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