When Melbourne single mum, Margaret, received her car insurance renewal notice, she was shocked to see it had risen over 10 per cent and was now nudging $1,000. Posting in CSMC’s member-only Facebook group, Single Mothers Stronger Together, Margaret shared that after spending five minutes on a comparison website, she was able to go back to her insurance company and present them with lower quotes she had been given. Her insurance company dropped her insurance premium by $200.
Other single mums quickly jumped into the conversation, telling of similar experiences.
We’re often told that we should negotiate with banks, insurance companies, and energy providers for lower rates, yet for many single mothers, that can feel overwhelming. Many of us don’t have the time to investigate other options; some simply don’t feel comfortable haggling. That’s why comparison websites are so popular. Simply fill in a few details and voila, instant comparable quotes.
Yet, with so many comparison website springing up, it can be difficult to know which one is right for you, which ones compare the offerings of the most companies – and do these sites receive kick-backs from companies to promote their plans?
We’ve done a dive to make it easier for single mothers to use comparison websites – and start saving money.
How comparison websites make a profit
Most comparison websites, like iSelect and Compare the Market, are paid a commission by insurance companies, which is usually a percentage of the premium. Others use a click-per-view model, where the insurer pays every time a potential customer clicks on one of their policies.
There are also some government-run comparison websites, such as https://www.privatehealth.gov.au/ for health insurance and https://compare.energy.vic.gov.au/
Should you be worried about this?
Be wary rather than worried. Comparison websites say that the commission they are paid does not impact the policies they present. A recent Compare the Market advertising campaign was based around the line: “The insurer pays commission, you pay nothing”. Despite this, a CHOICE review shows that phone consultants are incentivised by performance, so if you’re on the phone to a call centre and tossing up between a $500 policy and a $700 policy, bear in mind the phone consultant gets a higher bonus if you go with the $700 policy.
It is worth noting that if you use a comparison website, you will likely get a phone call or email from the site, recommending comparing other policies. This is more annoying than anything, but remember you have the power to opt out of emails and marketing phone calls.
How many companies are being compared?
One of the biggest criticisms of comparison websites is that they don’t compare every company on the market. So how do you know if there’s not a better deal out them from a company not associated with the comparison website?
CHOICE recently conducted a study of all the major comparison websites and you can find out in some detail, what percentage of the market any given website compares here. Our quick indicator from the CHOICE study is from iSelect. This one compares 11 out of 37 health funds, six life insurers, one home insurance, eight car insurance and three travel insurance products compared.
How to most effectively use a comparison website
Single mothers can make the most of comparison websites by doing these things:
Know what you want to compare: Identify not just the product you want to compare, but also what features of that product. For example, if comparing energy bills, you might want to check out things like grace periods, ongoing charges, options for green energy and any additional fees.
Consider using more than one website: Searching up a couple of comparison websites might give you a broader range of companies.
Compare like with like: Not all energy plans and insurance policies are the same, so make sure as many details as possible are compared.
A word on scammers
We couldn’t discuss an internet resource without adding a warning about scammers. They’re out there and they’re smart. When entering any personal information into a website, make sure the website is the one you’re wanting – a quick check of the URL should confirm this. (So for example, the legitimate iSelect url is https://www.iselect.com.au/ while a fake one might have extra letters or ‘ar’ at the end instead of ‘au’.) Also remember, legitimate comparison websites will never ask you for bank account or credit card details.
More advice from the single mothers brains trust
Right now, money-saving tips and conversations are happening on CSMC’s member-only Facebook group, Single Mothers Stronger Together. If you’re not in the group, we’re ready to welcome you. You have to be a member of CSMC to join the group, so if you’re not already a member, join today – it’s FREE for single mothers!
