Millions of Amazon customers risk overpaying hundreds of pounds for home insurance if they use its new comparison service.
Amazon has now rolled out its new insurance quote-finder to all customers.
You input your details, just as you would with a comparison website such as Moneysupermarket, and receive a range of quotes in minutes.
Expensive: Amazon has now rolled out its new insurance quote-finder to all customers – but we found the prices quoted to be considerably higher than rival sites
But a Money Mail investigation found the online retail giant is recommending home cover quotes that are up to 45 per cent pricier than on rival websites.
Insurance experts warn that this is because the quote-finder uses only basic information provided by customers.
That means homeowners receive quotes for high levels of cover they may not need.
Money Mail asked insurance analyst Fairer Finance to compare quotes for five properties on Amazon and rival comparison websites.
We asked for quotes with and without accidental damage cover. The properties ranged from a four-bedroom home worth £600,000 in Gloucestershire to a £300,000 one-bed home in Warwick.
In the vast majority of cases, the best quotes on Amazon were more expensive than on other websites.
Overall, Fairer Finance found the average difference between the cheapest quotes offered by Amazon and those from other comparison websites was £164.26.
In the worst case, Amazon’s quote for the £600,000 four-bed home in Gloucestershire was £740.06 with Ageas, including accidental damage protection.
Yet, on MoneySupermarket, the same property was quoted at just £536.94 with Ageas.
That means annual cover with the same insurer was £203.12 more — or 38 per cent higher.
On the same home, Amazon quoted £412.43 on a Co-Op policy. Yet on MoneySupermarket the quote was £285.79 — a 44 per cent difference.
Amazon’s quote for a £200,000 one-bed property in Hampshire was £355.76 with Ageas, including damage protection.
But the property could be insured with the same provider for £320 on both Compare The Market and MoneySupermarket.
One of the policies suggested on Compare The Market was a huge 64 per cent cheaper than the best Amazon deal, at £127,18. The quote was from insurance firm Policy Expert and included damage protection.
Amazon’s best quote on a £400,000 four-bed home in Suffolk was £298.69 with Co-Op. Yet on Compare The Market, the best deal with Co-Op was £162.78 — a difference of 45 per cent.
Amazon quoted £449 for the Suffolk four-bed with Ageas. The best quote was £255.21 at Compare The Market — meaning Amazon was £193.79 more expensive.
Fairer Finance also compared insurance on a two-bedroom detached home — also in Suffolk — with similar results.
Insurers on Amazon must meet a higher minimum standard of cover than other comparison sites demand.
This includes £1 million for buildings cover, £2 million for property owner’s or occupier’s liability, £500 for replacement locks and keys and £500 for freezer contents.
Big savings: Fairer Finance found the average difference between the cheapest quotes offered by Amazon and those from other comparison websites was £164.26
Buildings cover insures the cost of rebuilding your home — for example, if it burned down — while owners’ liability insurance covers any costs if someone injures themself while on your property.
James Daley, from Fairer Finance, says the high levels of cover Amazon offers will not be necessary for most customers — meaning they could be paying extra for this cover unnecessarily.
And this is a factor in why the same insurers offer differing prices on the various comparison sites.
‘Amazon’s £1 million buildings cover is easily enough to rebuild most homes.
‘But in reality, insurers will have worked out the actual rebuild value for each property and they know that £1 million will rarely be needed,’ Daley says. MoneySupermarket data, based on thousands of inquiries, shows that properties in London have the highest average rebuild cost, at £255,000.
It typically costs £205,000 in the West Midlands and £184,000 in the North East.
You can work out the cost to rebuild your home by visiting https://calculator.bcis.co.uk/.
Amazon launched its insurance quote-finder on November 25 by emailing Prime customers, boasting 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 muscle into the lucrative comparison website market.
Currently, customers are being offered a £10 voucher if they take out a policy using its new service. Non-Prime customers can also use the comparison finder.
But experts warn that Amazon’s decision to use a slimmed-down customer questionnaire — to try to make the process quicker — may have backfired.
Crucially, it may mean insurers don’t have enough information to provide a quote that fully reflects the customer’s needs.
Its questionnaire asks just 29 questions in total, including ten tick-boxes to confirm details, compared with about 60 questions on MoneySupermarket.
Independent insurance brokers also told Money Mail they ask customers 60 to 70 questions.
Amazon has initially partnered with just three insurers — Ageas, Co-Op and LV.
Competitors such as Compare The Market and MoneySupermarket have more than 100 providers, giving a broader choice and therefore more chance of lower quotes.
‘Regardless of the strengths and weaknesses of these brands, starting with only three insurers is incredibly thin compared with the choice you get on big comparison sites,’ says Mr Daley.
Peter Smits, the managing director of broker Ashbourne Insurance, also compared quotes provided by Amazon with his own panel of 40 insurers.
He found that the cheapest quotes were about 35 per cent higher on Amazon than from his panel.
He tested the following examples: a family of four in a four-bed detached house built in the 1930s; a retired couple in a three-bed detached bungalow built in the 1960s; and a young couple in a two-bed new-build terrace.
Uncompetitive: Insurers on Amazon must meet a higher minimum standard of cover than other comparison sites demand
For each, he included accidental damage and garden cover.
The cheapest quote Amazon offered the young couple was £661 — 111 pc more than the £314 offered by his own panel of insurers.
For the family of four, the cheapest quote was £638 on Amazon compared with £485 from Ashbourne Insurance’s own panel of brokers — a 32 per cent difference.
Amazon says it has internal research that suggests like-for-like quotes offered by its insurance store are not more expensive.
Vassil Gedov, general manager of financial services at Amazon, says: ‘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 provide insurers with the information they need to price competitively.’
Some of Amazon’s tick-boxes only allow for ‘yes’ or ‘no’ answers. This means customers can’t be more specific about their needs.
Those requiring more complex protection, such as for listed buildings or high-value jewellery, are unlikely to be able to find suitable cover with Amazon.
And those who run a business at home are not prompted to give any further detail.
Other questions excluded by Amazon include what type of locks are on your doors and when you are at home.
But these details can be crucial when getting insurance — the stronger the home security, in theory, the lower the quote.
‘There are also no questions about your occupation, which can make a difference in the eyes of some insurers,’ says Mr Smits.
‘The more information a customer can provide, the more accurate — and so the more competitive — their quotes will be.’
Over time, Amazon says it plans to add customer reviews, star ratings and claims acceptance rates, as well as more insurers.
Ageas, Co-op and LV say cover bought on Amazon is different from what is on offer through comparison websites or when buying directly, as it includes higher insured sums and extra covers within the price.
Vassil Gedov, from Amazon, adds: ‘Policies offered by Amazon include cover for some of the most common home insurance claims — they don’t omit essential coverage that we know customers want or need in order to lead with the lowest price.’
