Undoubtedly, people are increasingly
opting to shop on-line for insurance on-line, to cover our cars, holidays, homes
and phones. Indeed in the past year some 75% of new car insurance policies were
bought over the internet. Certainly, comparing prices on-line can save hundreds
of pounds, but there are a number of traps that we need to be careful of.

The rejection of insurance claims is
on the increase because of exclusions or escape clauses that were never spotted
by the policy holders. They simply went for the cheapest deal.

A big mistake people when buying
on-line is to think it will save time – but remember, you are trying to so the
same job as an insurance broker, so you should carry out all the checks they
would carry out.

Keep in mind that if you make the
wrong decision, your claim could be turned down, costing you many thousands of
pounds. If you want to save time, then use a broker, and let him do the work
for you. There’s nothing wrong with consulting a comparison site, as long as
you ensure you are comparing like for like, because the levels of cover can
vary greatly.

Insurance experts seem to agree that
buying on-line can give greater access to information and allows consumers to
compare products conveniently. However, all too often a consumer will just jump
at the cheapest product.

A spokesman from the Financial
Ombudsman Service warns that cheaper does not always mean better. He also urges
you to look at what the insurance does not cover.

So, how can you best protect
yourself? First ensure you really know who you are actually buying from and
whether or not they are regulated – otherwise, they could just run off with
your money. Somewhere on the company’s web page should be the confirmation of
regulation by the Financial Conduct Authority. Take care to note if it also
says it is the appointed representative of another company. If so, this means
the other firm, is responsible for complying with the law. So, in that case go
to their website and check for FCA regulation here too. Then, look the
organization up on the Financial Services Register, to make sure it is what it
says it is. You can check them out on fca.org.uk/register  However, it’s not simply enough to know
who’s selling you the policy – you’ll also want to know who’ll pay up if you
want to make a claim. This will be the underwriter, the one who may turn down
your claim and to whom you may need to complain.

Generally it‘s the seller of the
policy who’s responsible for ensuring all is clearly explained and all the
major terms and exclusions are highlighted. It’s the underwriter who decides
whether a claim should be paid.

Look at the phone numbers of all the
firms you are planning to deal with – do you really want to call an expensive
0870 or 0844 number every time you speak to them? If there’s no contact number
shown, or the number shown remains unanswered when you try to make contact –
then go elsewhere.

Next, make sure you know how much
the excess is (the amount of each claim you will have to pay yourself). Some
car insurers often have compulsory excesses on top of the agreed voluntary
excess – making the total excess over £500. Additionally, some firms may limit
your access to a hire car if yours is out of action, or insist you take a much
smaller car then your own insured one.

Ensure you disclose everything, even
speeding offences, when applying for car insurance. Failure to do so may result
in a blue pencil going through any future claim. Be as diligent in your check
for exclusions on all kinds of insurance. In the case of medical insurance,
declare existing medical conditions on all those to be insured, and be frank
about any treatment, scans, or referrals in the pipeline. Holidaymakers may not
consider hang gliding or snorkelling to be extreme sports – but some travel
insurance policies do, so please check carefully.

Check too on personal possessions
limits. Will the policy include or exclude jewellery or a huge flat screen TV or
hi-fi or computer equipment? Additionally will the policy provide a new replacement
or reduce the value for wear and tear?

Finally, your job as a consumer is
to read the policies when they arrive, and not just toss them in a drawer
somewhere.  Read them carefully to make
sure they say what you expect them to say following your pre-buying research.