Picking through the morass of financial products available is never easy, even for someone who has enough time (and the inclination) to do proper research. Thankfully, when it comes to just about any type of financial product, there’s help at hand.
Defaqto is a service run by the Financial Services Authority and provides an independent assessment of the quality of financial products products. This quality control means that you can straight away see how good insurance is without having to worry about what the person is trying to sell you.
So, for example, if you’re a landlord and you’re looking for insurance, you can just go to the Defaqto website and look for a four or five star policy, immediately find buy to let insurance from Legal and General and you’re off to the races.
Likewise for a student, if you’re looking at a credit card and you want to make sure that you get the right deal, Defaqto is a good place to start. It’s not, by any means, the beginning and the end of the process, but it’s a much better place to start looking.
The service really comes into its own in terms of insurance, because when it comes to insurance most people are willing to pay a little extra for better quality coverage. Many students travel in their summer holidays or take gap years before or after university, and having high quality travel insurance is absolutely vital and well worth spending money on. The difference between a four star Defaqto product and one without any stars is enormous, not only because it reflects the quality of the deal being offered, but also to a certain extent the pedigree of the company offering the deal.
It should be noted that Defaqto has absolutely nothing to do with price, it’s not a service that reflects the value of a product, primarily because if you’re buying something like travel insurance, individual factors such as age come into play. Of course, the higher the star rating, the more expensive one would expect the insurance to be, but that’s not a general rule and you can be sure you’ve got a bargain if you buy a five star policy at a similar price to a one or no star deal.
At the end of the day, getting the best deals are almost always about quality over quantity, and as a student saving time is always useful, so give Defaqto a thought next time you’re going to get insurance, a credit card, or just about any other financial product.
