How to shop around for general insurance ?

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    You can buy insurance yourself or with the help of a broker, but either way you’ll get key policy information about the insurance and what it covers.

    Generally, firms selling insurance and those providing insurance cover (underwriting the risk) have to be regulated by us, or be the agent of a regulated firm. There are some exceptions, for example the sale of extended warranties on non-motor goods (such as on electrical goods) where the person selling the insurance is also providing the goods.

    Regulated firms and their agents are put on FSA Register and have to meet certain standards. Always make sure that the firm you use is on FSA Register before handing over your money. If they aren’t regulated by us and things go wrong, you won’t have access to complaints and compensation procedures.

    Buying without advice

    You don’t have to get advice before you take out an insurance policy, and UK firms that sell insurance without advice still have to follow the rules. But it is up to you to decide whether the policy is suitable for you. You may have less grounds for complaint if the product turns out to be unsuitable.

    Comparison websites

    Comparison websites will ask you several questions and then provide you with quotes from various brokers and insurers. None of the websites cover the entire market, and some larger insurers are not represented on any of the websites, so you may wish to contact them directly. The comparison website should contain a list of the brokers and insurers they search.

    Some insurance comparison websites may ask you fewer questions to speed up the process, and instead make a number of assumptions about you. Always check the assumptions made about you and correct them where necessary.

    Most comparison websites will automatically pass your information on to a broker or insurer. Although this means you don’t have to provide them again, you should check that the correct information has been provided to the broker or insurer. If anything is incorrect you should either change the information on the broker or insurer’s website, or contact them and ask them to change it.

    So when using a comparison website make sure:

    • adverts about the site don’t make misleading claims about their market coverage – none of them cover the whole market so if they claim to this is unlikely to be true;
    • you fully understand what savings you can make if the firm is advertising what looks like an attractive rate;
    • the assumptions made about you are accurate and the same as the ones on the insurer’s quote; and
    • you understand what excesses you might have to pay.

    What information will you get?

    When you contact an insurance broker they will give you:

    • details of the service they are offering you – see Step 1; and
    • information about the insurance policy being offered to you – see Step 2.

    Step 1

    When you contact an insurance provider, they will give you details of the service they offer.  They will tell you:

    • whether they’re offering you advice or just information about the product;
    • whose insurance policies they offer – it may be from one company or many; and
    • how much you’ll have to pay for the service.

    Use this document, or information to shop around to get the service you want at the price you’re happy with.

    Step 2

    Once you’ve discussed what you need and answered all the questions about yourself and what you want to insure, the intermediary, insurance company or the firm selling you the insurance will give you key policy information. This sets out the essential facts. Ask questions if you don’t understand anything as misunderstandings could lead to the insurance company refusing to pay out when you claim.

    The policy information will set out:

    • what the insurance policy actually covers;
    • what it doesn’t cover;
    • any limits or restrictions; and
    • other important features you need to know before you make up your mind.

    Make sure you get this and that you read and understand it. Ask the provider or insurance company to explain anything you don’t understand.

    Use this document to shop around and compare like with like. Another policy may be cheaper but does it offer the same cover?

    Top tips

    1. Check that the firm is on FSA Register
    2. Use the policy information to compare other policies
    3. Answer the questions as best you can – it will help avoid misunderstandings.
    4. Ask questions if something is not clear.