MILLIONS of households risk paying up to £414 more for their home insurance because of incorrect assumptions being put made by comparison websites, a new study has warned.
Consumer group Which? found customers face being overcharged because some comparison websites are not asking the same questions as insurance providers.
As well as households forking out too much, Which? also found some people were being undercharged – putting them at risk of having an invalid policy or insufficient cover.
The group found four major differences between what comparison websites ask, and what home insurance providers are specifically after.
The biggest discrepancy was flooding, Which? found.
If a comparison website only asks if a home has been flooded before, and not when, the insurers will assume it happened within the past five or 10 years.
Which? found this pushed up one of the quotes from £290.77 to £704.42 – a difference of £413.65.
How to cut the cost of home insurance
IF you’re looking to cut down your home insurance bill, follow our tips:
- Buy 21 days in advance – Purchasing a policy three weeks in advance can cut your bill in half. Buy 30 days in advance it could cost you hundred because there aren’t as many policies out there. Taking out a policy too late and insurers will deem you a higher risk and whack up your premium.
- Never accept a renewal quote – Your policy could double overnight if you’re not careful. Make sure you put a reminder in your phone of when it’s up and shop around for a better deal.
- Check more than one comparison site – These sites offer different deals so it’s best to look at more than one site at the 21 day mark to see what they can offer.
- Check Direct Line and Aviva separately – Two of the biggest companies aren’t on comparison sites so you’ll need to check them too to see if they can offer you a better deal.
- Don’t wait for a renewal – If you find a better deal elsewhere, you can cancel your existing policy and get a refund for the rest of the year. There will be a fee though – usually £50 – so take that into consideration when you look at how much you can save.
- Increase your excess – If you choose to pay a higher excess, you’re premiums will drop. Be warned though – if you have to claim, it’ll cost you more, so don’t sign up for anything you can’t afford.
- Pay annually – Monthly instalments mean you can spread the cost of insurance, but they come at a cost. Pay in one go to save more. This trick works on your car insurance too. We found you can save as much as £440 a year by paying car insurance bills annually.
- Split it up – Sometimes it can be cheaper to go to different providers for your buildings and contents insurance. Check to see if splitting can save you money.
- Lock up – Keeping on top of security and maintenance often leads to lower premiums. Easy steps such as installing burglar alarms, fitting secure locks, and joining a neighbourhood watch can all lead to lower premiums.
Meanwhile, two sites did not let users say when their house was empty over the weekend – knocking down the price of the insurance policy by £98 in one case.
Which? advises customers to still use comparison websites, but to then double check the price and information provided directly with the insurer.
It’s also a good idea to use more than one comparison website so you can check any major differences in price.
Compare the Market told The Sun: “It is advisable that customers who believe they have exceptional circumstances highlight this to their prospective insurance provider, as it could affect their premium.”
Go Compare told us: “It’s imperative, whether someone has used a comparison website, a broker or gone direct to an insurer, that people read these documents carefully to make sure there aren’t any mistakes.”
The Sun has yet to hear back from MoneySuperMarket or Confused.com.
When asked by Which? MoneySuperMarket said: “We work closely with insurers to ensure the information we ask for will enable them to provide customers with a complete quote based on their current circumstances.”
While Confused.com said: “We regularly review the questions we ask our customers to make sure they are able to provide the most accurate information and get the best price for them.”
Home insurers are also unfairly dodging payouts to customers on clauses many aren’t even aware of, experts have warned.