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.  

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Rebecca Goodman
Insurance expert
2
minute read
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Posted 29 JANUARY 2020 Last Updated 11 MAY 2022

What is Defaqto?

Have you ever noticed that stars are often talked about when it comes to insurance products? Well, those stars are a rating system awarded to financial products including travel insurance. They come from Defaqto, 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 five 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. That’s why it’s such a useful tool when trying to find a new insurance policy.

It’s great that there are so many different insurance providers and policies available because it increases competition and makes prices more affordable. But this also means it can be tricky to compare policies. That’s where Defaqto’s rating system comes in handy as it gives a clear indication of just how good an insurance product really is.

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

Customers with more serious pre-existing medical conditions 

No matter what kind of insurance you buy, you need to declare any pre-existing health conditions to the insurance provider. This may affect the price you pay but it’s unavoidable – in fact, if you fail to mention a health condition, your policy might be rejected if you ever need to make a claim.

When you declare medical conditions on our website, we’ll only show quotes from insurance providers who will cover all declared medical conditions, with no exclusions.

MoneyHelper has 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 MoneyHelper or by calling them on 0800 138 7777.

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.

Think of the star rating as a handy extra tool to help you pick the best travel insurance policy, one that’s not only affordable but will also work for you.

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, might not be to 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 states 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.

If we’re being honest, we know that no one enjoys spending time trawling through the small print of a travel insurance policy. This is where Defaqto could lend a hand because its analysts can take some of the admin work away from you. It doesn’t mean that you could just buy a policy and neglect to look at the details – but the star system can give you a good indication of what kind of policy you’re buying.

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. We know price isn’t everything, but if a product receives five stars and it’s five times the price of a four-star product, it may not be the 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. It’s always useful to find out what kind of company you’ll be dealing with if something goes wrong, and this could be crucial to making a decision as to which insurance provider to go with. 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. 

This is why it’s important not to rely on one rating system. You wouldn’t go on holiday based on just one friend’s opinion so apply the same method to picking travel insurance. Look at a few different reviews, check how the company is doing on social media and how they respond to customers, and always compare the price before you buy.

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, might 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 getting the best deal for your money. You should always consider customer service ratings too, so you know you’re in safe hands if something does go wrong.

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

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