INSURANCE


DO NOT THINK ALL POLICIES ARE THE SAME? THEY ARE MOST DEFINITELY NOT


The emergence of price comparison websites (PCW’s) has had a huge impact on the home insurance industry which can affect consumers in many ways.


As we are aware, cheapest does not always mean the best, the old saying “if you buy cheap, guess what you get, CHEAP”.


The first indication to consider is the Defaqto rating of insurance contracts, a 1-star Defaqto rated policy is a basic product compared to the rest of the market, the highest rated Defaqto policy is 5-star which rates as one of the best quality offerings on the market.


WHAT DOES DEFAQTO STAR RATING MEAN: -


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Defaqto’s vision is to help people make a better financial decision, this can be assisted by speaking to a qualified financial adviser who can guide you through the numerous options to help arrange a policy that suits your requirements and provides the quality of cover you need. They can explain the benefits of the cover which is far more important than just finding the cheapest available. Get this wrong, make the wrong desicion and it could be one of the most expensive mistakes you will ever make. Of course, the only problem with services that sound too good to be true is that they usually are. And like many all singing all dancing solutions, when you delve a little deeper into PCW’s, you soon start to see the cracks, on closer examination, they are not quite the financial panacea they appear to be.


RISKY ASSUMPTIONS


In 2014 the Financial Conduct Authority (FCA) conducted extensive consumer research that highlighted several concerns


with PCW’s. One of the key observations was that they create a false sense of security for customers – described by the FCA as a ‘halo effect’ borne out of brand familiarity.


It seems that people make a number of assumptions about these sites that puts them in a favourable light without any real justification. For example, there is a common belief that as long as questions are answered accurately and honestly, the products matched will always provide appropriate cover. Every product is different and there are no guarantees that features and benefits will be aligned to customer needs.


If you need Buildings Insurance, Contents Cover, Life Assurance, Critical Illness Cover, Serious Illness Cover, Income Protection, if you could not work and most importantly financial security for a young family. It is most important to obtain the correct advice to ensure you arrange for your future with exactly the type of policy and cover needed. It is always better to be over insured than under insured.


We will start to look at the various types of insurance policies available and the cover provided in the next issue.


For further information please contact Peter Hunt on: 0121 503 0961 www.moneywatchfinance.com


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