Price or value

I watched with interest this morning a feature on BBC breakfast reporting that customers could save up to 70% on their insurance by shopping around. In addition they reported that those without internet access were probably at a disadvantage as they could not benefit from a truly independent search of the market and the best rates.
This feature was produced on the back of a recent FCA announcement that the City regulator is to investigate how home and car insurance policies are priced after finding “hidden” discrimination between customers.
Whilst I would agree that the practice of dual pricing, different financial incentives for new customers at the expense of penalising loyal customers by the larger insurance brands should be investigated, I think that the BBC’s advice to “shop on-line” for the best deal is at best miss-guided and at worst potentially exposing customers to inferior cover and service.
I whole heartedly agree that customers should be able to shop in confidence for the best insurance price; however that should not be at the expense of either cover of service.
What the BBC failed to explain is that if you shop on-line for your insurance, you become the broker and so if the policy is not “fit for purpose” you have no one else to turn to for advice or guidance at the point when you need it most; when you have to make a claim.
On-line sales are “non-advised” and come with little or no recourse against the supplier if the cover is not what you expect, as opposed to an “advised” sale provided by an independent broker which will give you right of recourse if miss-sold or miss-advised.
If as a consumer we were to purchase any items or goods and experience a 70% saving, the first thing most of us will do is query the price difference, wanting to know why the difference.
The same should be considered for a 70% saving on your insurance policy and I can almost guarantee that with that level of saving there will be differences in cover and service.
The best advice would be to compare apples with apples, rather than just the initial price, surely the most important aspect of any insurance policy is the cover and service you receive when you come to make a claim?
Think of it as if you were buying from a fast-food outlet as opposed to dining in a restaurant. The two will provide very different experiences before, during and after the meal and at differing price levels.
Don’t get me wrong, I’m not opposed to the odd burger, both fast-food and waiter service restaurants have their places and it is great to have a choice, however I am not sure that a staple diet of fast-food would be good for my health!
The differences in cover should be easily apparent as the only times you get to know the value of your policy is when you come to make a claim, by which time it maybe too late.
Only an independent, community based provincial broker with whom you can converse can provide a competitive solution that comes with peace of mind and these can be found on most high streets in every town.