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What is Defaqto and how can it help you choose travel insurance?

Ever wondered what those Defaqto star ratings mean? We take a look at how they work, and how they can help you make decisions about what travel insurance to buy.  

Ever wondered what those Defaqto star ratings mean? We take a look at how they work, and how they can help you make decisions about what travel insurance to buy.  

Patrick Ikhena
From the Travel team
2
minute read
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Posted 17 SEPTEMBER 2020

What is Defaqto?

Defaqto is an independent service that compares financial products. Defaqto analysts study the financial market for services and products, before giving them a star rating based on the features and benefits they offer, with 5 stars being the top rating. These analysts are constantly surveying the market, researching and analysing new products as they enter the market, to help you make the right decisions.

Defaqto experts have researched, collected and assessed nearly 41,000 financial products, and are constantly updating their findings so customers have access to the most recent results.

CORONAVIRUS UPDATE

On 02 October 2020, the Foreign Commonwealth and Development Office (FCDO) updated the list of countries that are exempt from its ongoing advice against all non-essential international travel.

If you choose to travel overseas to a destination where the FCDO is advising against non-essential travel at the time of your departure, then your insurance policy will be invalid, and any claim likely to be rejected.

For domestic travel, please check the local public health rules for the destination you wish to travel to within the United Kingdom.

For more information, please see our coronavirus and travel insurance page.

Customers with more serious pre-existing medical conditions

Our panel includes insurance providers who quote cover for all medical conditions declared on our website, with no exclusions.

The Money and Pension Service (MaPs) has also launched a directory of insurance providers, who may be able to provide quotes over the phone if you have more serious medical conditions. Find more information at the Money Advice Service or by calling the British Insurance Brokers Association on 0370 950 1790.

How can Defaqto help me choose travel insurance?

Defaqto star ratings appear on travel insurance and credit cards here on Compare the Market, to help you make a more informed decision when comparing these products.

Once you’ve used our comparison tool to help you narrow down your quote options, you’ll still have a lot to choose from.

Knowing that products have been rated based on their quality can help you make your final decision. And because Defaqto is independent, you know that each product or policy has been thoroughly examined, and you're getting an expert, unbiased assessment.

What do the Defaqto stars mean?

The first thing you should probably know about Defaqto star ratings, is that they don’t take price or service into account. They are based purely on the features, benefits and terms of the product itself, nothing more. This aims to prove that the star ratings are based purely on fact, rather than subjective or circumstantial criteria. What may be of great value to you, may not be for someone else, while customer service can be heavily influenced by who’s on the other end of the phone on the day you call up. 
 
Here's a breakdown of the Defaqto star ratings: 

  • 1 Star: provides a low offering
  • 2 Stars: provides a below average quality offering
  • 3 Stars: provides an average quality offering
  • 4 Stars: provides a good quality offering
  • 5 Stars: provides one of the highest quality offerings in the market

The ratings are given to the products, not the insurance or credit card providers, and are analysed daily and updated yearly.

How are Defaqto start ratings decided?

Defaqto state that their ratings are “based on facts, not opinion”. They remove price and customer service from the equation, as these are more subjective in how they are valued. Instead, their analysts rate products and services based entirely on the features and benefits they offer, along with the small print that many of us struggle to read properly. Features are individually scored, with the product’s total then used to assign a one to five-star rating. 
 
Because of this, a one-star rating doesn’t necessarily mean a product is bad, it’s just that it’s a basic policy with fewer features, but if the price includes what you need, then there’s no reason you shouldn’t choose it. Meanwhile, products that offer the most (useful) features tend to receive a higher rating. In order to receive a four or five-star rating, some “core criteria” features must be included. 
 
Defaqto analysts continually examine the markets throughout the year, regularly consulting with the relevant industries to determine which features are most important to people like you. This means that scores are updated each year (on 1 February), to ensure that any product changes are captured.

What are the downsides of the Defaqto system?

Like most things, Defaqto ratings aren’t perfect. There are a number of disadvantages to relying purely on these, and you should always look for a range of sources when researching a product.  
 
So, what are the disadvantages of Defaqto ratings?

  • They don’t consider price – value is everything with a product or service, and you’ll want to know if you’re getting a good deal. Defaqto ratings only review products and services based on their features. A product may receive five stars, but if it’s five times the price of a four-star product, it may not be right deal for you.
  • They don’t consider customer service – while a travel insurance policy might have all the features in the world, if the person you’re going to talk to when you need that help most is unhelpful, then a bad situation can be made worse. Always look for a customer service rating when considering a provider, to ensure that you’re well looked after when you need it.
  • How the ratings are calculated – this one is more subjective, but that’s entirely the point. For a rating system that prides itself entirely on using the facts to determine a product or service’s worth, the system used to calculate that score is subjective. Certain features and benefits are weighted differently, which can make complicated products like insurance policies difficult to distill into a single rating. Products and services are all treated equally in the calculations, but things you consider important may not hold equal value by them.

How do I use the Defaqto star ratings?

When comparing travel insurance, the Defaqto star rating for an insurance provider will be shown on the quote results page, so you can see which providers have the highest rating. 
 
However, just because a product has a five-star rating, and another has a three-star rating, it doesn’t mean you should always go for the five-star one. As we mentioned earlier, these Defaqto ratings are based entirely on the product or service’s features, benefits and terms. Price and service aren’t considered at all, and these things may be more important to you. 
 
At the end of the day, you need to find the right product that suits your needs. A travel insurance package with fewer features, that’s far cheaper, may still cover you for what you need, so you could save yourself some money by choosing a three-star product. For example, a five-star travel insurance product may include cover for skiing and mountain climbing, but if you’re spending a week on a Caribbean beach, you won’t need any of that, so why pay more for it? 
 
While we recommend using Defaqto star ratings when comparing products, you shouldn’t solely base your purchase on them. Value is really important, and you should always consider customer service ratings, too.

When comparing credit cards, the Defaqto Star Rating will appear when you expand the ‘More details +’ section.

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