Even before the UK entered it’s worst recession since the Second World War, we were slowly, as a nation, driving harder bargains for all sorts of products and services. Our European colleagues always thought it quite funny that us Brits did not haggle for anything. The only time we ever did this was when we were on holiday at some sunny market on a Sunday morning. We would haggle like mad for our leather belts or fake hand bags. But, back in the UK we would happily pay whatever was asked for our car, home and business insurance.
But, in the last ten years, there has been a growth in people actually standing back and reviewing, in particular, their financial services and energy suppliers. To support this, there have been two types of websites appearing. The first one is the type that offers advice on the best deals and where to go to get all types of financial services cheaper. These are usually “run” or populated by the members, they recommend deals or say who they would not use.
The second type of site is one that automates the whole process and “recommends” a company, usually the cheapest. Now, being a layman, electricity is electricity, so the job it does is the same whoever you get it from. Any issues you may have are with the costs of the supplier, how they deal with complaints and if you have a lack of power. The actually product you receive though, is exactly the same.
But, when we go to websites that, for example, compare business insurance, the products you get can be vastly different. The websites though always, without fail, push the cheapest. We do not have a problem with people looking for the best deal, but when you are sold a financial services product you should at least have the knowledge of whether this is the best, average or worst product on the market. How do you know whether the excess you are being charged is comparable? Do you have legal expenses? What sort of minimum security should you have?
There are may question which you should be able to discuss with someone. The problem is that the websites only give you a link through to a policy wording or a summary of cover, you are them expected to look at the policy and decide whether Company A, that is 10% cheaper is better than Company B or C? Each wording will easily be at least 50 pages long. You cannot possibly make head nor tail of the intricacies of the wording. This is where we say you should always, without fail, speak to a business insurance broker. By all means, go to a comparison web site, but you should also speak to a real, human being as well.
A broker earns their commission in a very similar way that some of the comparison sites do. However, a broker needs to be authorized and regulated by the Financial Services Authority. As part of this, they have to say that they will always treat customers fairly. If they flog you a cheap product (for example that they get higher commission on) and you find yourself with some serious gaps in cover, then you have a come back to the Ombudsman. You are not always afforded the same protection with a comparison website.
Jack Brown is a professional writer who writes on various finance and insurance related topics.