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Car Insurance Brokers
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Car Insurance Brokers at the Car Insurance
UK Supermarket
Using car insurance brokers
used to be a popular way to find cheap UK motor insurance. While
they maintain some popularity, people are more likely to find them via
a price comparison site nowadays where their price has been found to be
one of the cheapest generated by the price comparison site's aggregator
system.
Very often car insurance brokers are the cheapest insurance providers
found in this way. Given that car insurance brokers check numerous
quotes from their own panel of insurers to bring you the cheapest, this
is not surprising.
In some cases it can be a good idea to go direct to car insurance
brokers, without going via a price comparison system. For example,
Endsleigh is one of the car insurance brokers that specialises in
finding low cost quotes for young drivers. While others, for example,
Hastings Direct, can be good value across most car insurance groups.
One problem with car insurance brokers is that there can be a conflict
of interest between the size of their commission and the policy that
represents the best value to the consumer. The commissions paid by
insurance companies to car insurance brokers can vary more than
ten-fold. Let us imagine a scenario whereby policy 'A' costs the
consumer £420 for which the car insurance broker's commission is
£80. An identical policy 'B' costs the consumer £400
for which the broker makes £20. If the broker saves the consumer
£20 in this scenario, he loses £60 in commission; so there
is a risk that the consumer will not be presented with the genuine best
quote.
In fact, as car insurance brokers are obliged to compete alongside
numerous competitors in the majority of cases when people compare
quotes via an aggregator, as this is the UK's favourite way to buy car
insurance, biasing results in their favour is unwise as it is likely to
result in no commission at all if they are uncompetitive.
So, while price comparison sites are not perfect, they have forced the
insurance industry in general, not just car insurance brokers, to offer
more competitive products which undoubtedly benefits the motorist.
In some ways, price comparison sites can be seen as simply meta car
insurance brokers. In this context 'meta' refers to the grouping
together of numerous unitary services to produce a more powerful,
useful and authoritative result. And, as such, these services could
suffer from the same built-in conflict of interest as car insurance
brokers - that is: commission versus consumer value.
There is actually some evidence that this effect exists for some price
comparison services, but nonetheless, because they compare so many
quotes, they are still likely to find you the best prices around.
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