Known Or Unknown, Are Big Insurance Companies Better?
Who’s who?
If you go to a broker for your insurance the chances are they may well come up with a highly obscure company that will offer you the cheapest quote. Trusting your broker is fine as you will have some comeback through them if the service you receive from the insurer isn’t quite up to scratch, but what if you are doing your own research online? Are the big boys, the known names, the best ones to go for? With this in mind, we look at car insurance.
A sample-example
We plugged some data into a popular financial comparison site and came up with whole host of quotes from different companies offering to insure a four year old Ford Focus.
This is who we tried to insure: A Health Care worker, living in Tunbridge Wells, Kent, who owns a 2001 Ford Focus which is kept in a garage. This healthcare worker was born in 1960 and wanted fully comprehensive insurance with an excess of £150.
Immediate responses came in from a company called Swift Cover, an internet based insurance company that nobody had ever heard of. They were cheap, offering premiums of just £149.19, but our healthcare’s excess for any accidents she may have caused herself went right up to £1,000. For us alarm bells started ringing as the company hasn’t met our requirements with this quote, so how would they treat us if we made a claim?
Interestingly, Swift cover were covering their options because they also put in a quote of £203.84 and as there was no added note on that entry about the excess we can only assume they were going by our needs on that one. Clearly Swift cover were canny and presumably always put in a low quote to get the cheapest rate of all the results. Had we been buying on cost then maybe this ploy would have worked, but it does appear rather desperate.
Next up: another unknown – its4me.co.uk, their quote was for £213.51. It’s4me are a purely web-based broker, unlike Advantage Insurance, which again being unknown publicised itself as being the UK’s largest High Street broker and had a quote also of £213.51. They featured the Swinton logo on their result, so we presume they are part of the Swinton Group of companies and therefore part of a very well known organisation.
Six or so unknown brokers and insurance companies later and further down the list quoting a premium of £232.82 we find Equity Red Star, who again we have never heard of, but they are associated with Kwik Fit, who in recent years have expanded into insurance. So another well known High Street name.
But you might be forgiven for being a bit suspicious about quality control and customer care if you are dealing with an unknown intermediary like Red Star. This is not to slur them, but just to point out the possible caution people may feel in trusting an unknown organisation.
Two further places on down the list and we really start to get amongst the well known big boys who were willing to deal with our lady health care professional. Zurich Insurance is massive and they were quoting £234.49. So, approximately £30 more expensive than our cheapest like for like quote.
Other notables in the long list were, Barclays who notched up £247.99 and Norwich Union who managed a huge £262.99. Asda put in an offering somewhat at odds with their supermarket grocery advertising campaign as one of the most expensive, at £263.98.
Decisions, decisions
We believe our nice lady health car professional would have opted for the first quote from Zurich. She would have heard of the company and therefore have felt some security and trust in them, but at the same time the quote wasn’t that much higher than the cheapest.
But would they have been the best? That, of course, depends on what her expectations would have been in the first place.
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