>
Millions of Amazon customers risk paying hundreds of pounds over home insurance if they use the new comparison service.
Amazon has now rolled out its new insurance quote finder to all customers.
You enter your details, just like on a comparison website such as Moneysupermarket, and receive a range of quotes within minutes.
Expensive: Amazon has now rolled out its new insurance quote finder to all customers, but we found that the quoted prices were significantly higher than competing sites
But a Money Mail study found that the online retail giant recommends home decking quotes that are up to 45 percent more expensive than competing websites.
Insurance experts warn that this is because the quote finder uses only basic information provided by customers.
That means homeowners get quotes for high levels of coverage they may not need.
Money Mail asked insurance analyst Fairer Finance to compare quotes for five properties on Amazon and competing comparison websites.
We have requested quotes with and without cover for accidental damage. Properties ranged from a £600,000 four-bedroom house in Gloucestershire to a £300,000 one-bed house in Warwick.
In the vast majority of cases, the best quotes on Amazon were more expensive than on other websites.
Overall, Fairer Finance found that the average difference between Amazon’s cheapest quotes and those from other comparison websites was £164.26.
At worst, Amazon’s quote for the £600,000 four-bed house in Gloucestershire was £740.06 at Ageas, including accidental damage protection.
But MoneySupermarket listed the same property at Ageas for just £536.94.
That means annual cover with the same insurer was £203.12 more – or 38 per cent higher.
For the same home, Amazon quoted £412.43 on a Co-Op policy. But on MoneySupermarket the quote was £285.79 – a difference of 44 per cent.
Amazon’s quote for a £200,000 single bed property in Hampshire was £355.76 at Ageas, including damage protection.
But the property can be insured with the same provider for £320 on both Compare The Market and MoneySupermarket.
One of the policies featured on Compare The Market was a whopping 64 percent cheaper than Amazon’s best deal, at £127.18. The quote was from insurance company Policy Expert and included damage protection.
Amazon’s best quote for a £400,000 four-bed house in Suffolk was £298.69 with Co-Op. But on Compare The Market, the best Co-Op deal was £162.78 – a 45 per cent difference.
Amazon quoted £449 for the four-bed Suffolk at Ageas. The best quote was £255.21 on Compare The Market, meaning Amazon was £193.79 more expensive.
Fairer Finance also compared the insurance of a two-bedroom detached house – also in Suffolk – with similar results.
Insurers on Amazon must meet a higher minimum coverage standard than other comparison sites require.
This includes £1m for building cover, £2m for owner or occupier liability, £500 for replacement locks and keys and £500 for the contents of the freezer.
Big savings: Fairer Finance found that the average difference between the cheapest quotes offered by Amazon and those from other comparison websites was £164.26
Building coverage insures the cost of rebuilding your home — if it burns down, for example — while homeowners’ liability insurance covers all costs if someone injures themselves while on your property.
James Daley, of Fairer Finance, says the high levels of coverage Amazon offers will not be necessary for most customers, meaning they may end up paying unnecessarily extra for this coverage.
And this is one factor why the same insurers offer different prices on the different comparison sites.
Amazon’s £1million building coverage is easily enough to rebuild most homes.
“But in reality, insurers will have calculated the true rebuild value for each property and they know that £1 million will rarely be needed,” says Daley. Data from MoneySupermarket, based on thousands of surveys, shows that properties in London have the highest average cost of refurbishment at £255,000.
It typically costs £205,000 in the West Midlands and £184,000 in the North East.
You can calculate the cost to rebuild your home by visiting https://calculator.bcis.co.uk/.
Amazon launched its insurance quote finder on Nov. 25 by emailing Prime customers, in which they boasted of an “improved shopping experience with a streamlined, simple quote questionnaire.”
About 15 million people pay £8.99 a month for Prime, which offers unlimited deliveries and a TV streaming service.
This huge database was ripe for Amazon to exploit by trying to penetrate the lucrative comparison website market.
Currently, customers will be offered a £10 voucher when they take out a policy with the new service. Non-Prime customers can also use the comparison finder.
But experts warn that Amazon’s decision to use a pared-down customer questionnaire — to try and speed up the process — may have backfired.
Crucially, it could mean insurers don’t have enough information to provide a quote that fully reflects customer needs.
The questionnaire only asks a total of 29 questions, including ten boxes to confirm details, compared to about 60 questions on MoneySupermarket.
Independent insurance brokers also told Money Mail that they ask customers 60 to 70 questions.
Amazon is initially working with only three insurers: Ageas, Co-Op and LV.
Competitors such as Compare De Markt and GeldSupermarkt have more than 100 providers, which means there is a wider choice and therefore a greater chance of lower prices.
“Regardless of the strengths and weaknesses of these brands, starting with just three insurers is incredibly meager compared to the choice you get on major comparison sites,” says Mr. Daley.
Peter Smits, director of broker Ashbourne Insurance, also compared quotes from Amazon with his own panel of 40 insurers.
He found that the cheapest quotes on Amazon were about 35 percent higher than those of his panel.
He tested the following examples: a family of four in a detached four-bed house built in the 1930s; a retired couple in a three-bed detached bungalow built in the 1960s; and a young couple on a newly built terrace with two beds.
Uncompetitive: Insurers on Amazon must meet a higher minimum standard of coverage than other comparison sites require
For each, he included accidental damage and yard coverage.
The cheapest quote Amazon offered the young couple was £661 – 111 per cent more than the £314 offered by its own panel of insurers.
For the family of four, the cheapest quote was £638 on Amazon compared to £485 from Ashbourne Insurance’s own panel of brokers – a difference of 32 per cent.
Amazon says it has done internal research suggesting like-for-like quotes offered by its insurance retailer are no more expensive.
Vassil Gedov, general manager of financial services at Amazon, said: “Amazon is not an insurer and each participating insurer sets policy prices in its sole discretion.
“But we won’t stop innovating and working to improve the shopping experience by adding additional insurers and regularly reviewing our questionnaire to give insurers the information they need to price competitively.”
Some Amazon checkboxes only allow “yes” or “no” answers. This means that customers cannot be more specific about their needs.
Those who need more complex protection, such as for listed buildings or valuable jewellery, are unlikely to find suitable coverage with Amazon.
And those who run a business at home are not asked to give further details.
Other questions excluded by Amazon include what type of locks are on your doors and when you’ll be home.
But these details can be crucial when buying insurance: the stronger the home security, in theory, the lower the quote.
‘There are also no questions about your profession, which can make the difference in the eyes of some insurers,’ says Mr Smits.
“The more information a customer can provide, the more accurate – and therefore more competitive – their quotes will be.”
Amazon says it plans to add customer reviews, star ratings and claims acceptance rates over time, as well as more insurers.
Ageas, Co-op and LV say coverage bought on Amazon differs from what’s offered through comparison websites or when you buy direct because it includes higher insured amounts and additional coverages in the price.
Amazon’s Vassil Gedov adds: ‘Policies offered by Amazon include coverage for some of the most common home insurance claims – they don’t omit essential coverage that we know customers want or need to lead with the lowest price .’
l.purkess@dailymail.co.uk
Some links in this article may be affiliate links. If you click on it, we may earn a small commission. That helps us fund This Is Money and use it for free. We do not write articles to promote products. We do not allow any commercial relationship to compromise our editorial independence.