Price-comparison websites could be in line for tighter regulation by the City watchdog, the Financial Services Authority (FSA), following an appeal by the British Insurance Brokers Association (Biba).
In a study conducted for Biba, over half of the insurance buyers interviewed said they did not fully understand the differences between policies offered via comparison websites. Only 6 per cent thought the details of what a policy did and did not cover were explained fully, and 84 per cent said the product details carried on the sites could be confusing.
Some 93 per cent of consumers, Biba reported, expect insurance-comparison sites to be regulated in the same way as insurance intermediaries.
The research also found that many of the websites use "assumptions" on factors like age, health and lifestyle as the basis for their headline quotes, which could lead to consumers purchasing a policy that is not appropriate for them.
But James Harrison, chief executive of the comparison service Insurancewide.com, said: "Biba seems a little behind on this issue. We all face the challenge to provide our customers with comprehensive but very clear, digestible information about all the factors affecting policy cover and price. We are working hard to be able to standardise the way people make comparisons."
He added: "The comparison sites are already in discussions with the Association of British Insurers with a view to producing guidance notes on the responsibilities of websites and insurers in the context of meeting their requirements to treat customers fairly.
"The FSA is fully aware of this and is supportive of our efforts."Reuse content