Web warning
Some customers are being led to believe that they save money by using online price comparison websites, but one travel insurance provider is warning consumers that all may not be as it seems. Mandy Aitchison reports The company in question is Essential Travel, which has said that ‘guerilla marketing by price comparison sites had conditioned UK consumers to believe they save money searching the entire market to find the cheapest prices’. Stuart Bensusan, spokesman for the company, explained further: “Companies on these so-called ‘money saving’ websites are operating under several trading names, so while a top-10 search gives consumers the impression that they are viewing a range of prices from 10 different providers, in reality the 10 insurance ‘brands’ on display are actually owned by a small pool of three or four companies. In some cases, it’s as few as two separate providers. Where’s the comparison in that?” According to a statement issued by Essential Travel, a search for cheap travel insurance policies on the Go Compare website revealed that its top 10 policies were supplied by just two different companies; while on CompareTheMarket, top-10 policies were offered by three different providers. Based on this information, says the travel provider, if consumers were to purchase a policy from inside the top 10 results from Go Compare, there is an 80-per-cent chance that they will buy a policy from Drakefield Insurance, and a 20-per-cent chance they would buy a policy from Citybond Insurance. On CompareTheMarket, customers are given a 60-per-cent chance of buying a policy from Rock Insurance, and a 30-per-cent chance of buying cover from Blue Insurance. One of the further problems of price comparison websites identified by Essential Travel is that the sites often focus solely on price, rather than the real level of insurance cover on offer and details of excess payments. Bensusan believes that: “Insurers can only offer the exorbitantly low prices appearing on these sites by levying extremely high excesses on policies.” He continued: “Consumers aren’t always aware of the level of cover afforded by these cheaper policies; for example, while Moneysupermarket.com offers the lowest-price policy at £27, it has the highest excess at £300. A review of our recent claims showed 70 per cent of them were for amounts totalling less than £300, which means that had those customers purchased this particular low-cost policy they would have had to stump up the entire cost of the claim themselves.” Bensusan concluded by saying: “Consumers need to be wary of websites claiming to offer an overview of prices across the whole market. The cheap policies displayed on these sites are inexpensive for a reason and don’t represent value for those that need to claim. We strongly urge holidaymakers to speak with a travel insurance expert rather than relying on misleading price comparison websites.”
Some customers are being led to believe that they save money by using online price comparison websites, but one travel insurance provider is warning consumers that all may not be as it seems. Mandy Aitchison reports
The company in question is Essential Travel, which has said that ‘guerilla marketing by price comparison sites had conditioned UK consumers to believe they save money searching the entire market to find the cheapest prices’. Stuart Bensusan, spokesman for the company, explained further: “Companies on these so-called ‘money saving’ websites are operating under several trading names, so while a top-10 search gives consumers the impression that they are viewing a range of prices from 10 different providers, in reality the 10 insurance ‘brands’ on display are actually owned by a small pool of three or four companies. In some cases, it’s as few as two separate providers. Where’s the comparison in that?”
According to a statement issued by Essential Travel, a search for cheap travel insurance policies on the Go Compare website revealed that its top 10 policies were supplied by just two different companies; while on CompareTheMarket, top-10 policies were offered by three different providers. Based on this information, says the travel provider, if consumers were to purchase a policy from inside the top 10 results from Go Compare, there is an 80-per-cent chance that they will buy a policy from Drakefield Insurance, and a 20-per-cent chance they would buy a policy from Citybond Insurance. On CompareTheMarket, customers are given a 60-per-cent chance of buying a policy from Rock Insurance, and a 30-per-cent chance of buying cover from Blue Insurance. One of the further problems of price comparison websites identified by Essential Travel is that the sites often focus solely on price, rather than the real level of insurance cover on offer and details of excess payments. Bensusan believes that: “Insurers can only offer the exorbitantly low prices appearing on these sites by levying extremely high excesses on policies.” He continued: “Consumers aren’t always aware of the level of cover afforded by these cheaper policies; for example, while Moneysupermarket.com offers the lowest-price policy at £27, it has the highest excess at £300. A review of our recent claims showed 70 per cent of them were for amounts totalling less than £300, which means that had those customers purchased this particular low-cost policy they would have had to stump up the entire cost of the claim themselves.”
Bensusan concluded by saying: “Consumers need to be wary of websites claiming to offer an overview of prices across the whole market. The cheap policies displayed on these sites are inexpensive for a reason and don’t represent value for those that need to claim. We strongly urge holidaymakers to speak with a travel insurance expert rather than relying on misleading price comparison websites.”