Competition is pretty strong in this sector with so many intermediaries on the high streets, constant advertisements on the TV and many websites. You have probably heard that you can buy cheap auto insurance online. It is only logical that they give discounts to customers who practically sell policies to themselves. They do all the hard work of learning about coverage options, filling forms, checking details, getting convinced about the quality of products and at the end paying for it.
Most companies quickly realized that they could reduce sales teams substantially if they could convince customers to do most things on there, including submitting claims. Vehicle insurers also knew that they needed to offer discounts to tempt more and more customers to engage with them through this medium since it wasn’t wide spread and many consumers were reluctant.
In a short space of time, it has become commonplace and they have been reducing workforce substantially, especially telephone sales teams. Although it may be disputed, they have been resisting automobile insurance rate increases thanks to savings in wages. So, it is fair to say that the Internet was influential in keeping prices low for everyone. However, the question to answer is can you still get these lower rates today?
Is Car Insurance Cheaper Online?
If it is more economical anywhere it has got to be here. All other methods involve manpower and have to include either costs of wages or commissions and infrastructure. When policyholders submit the forms and payments electronically carriers save money and it is only fair to expect that these savings are reflected on premiums. This logic seems to be accepted by majority of companies, as they tend to differentiate rates depending on the outlet.
For example, Progressive lays out their position clearly as below when they answer the question of why they offer different rates through agents, online or by phone.
“Buying direct or through an agent could result in different prices for Progressive policies because those areas make independent decisions about the expenses they incur and the prices of their products. If you come through a broker, your rate includes the commission paid. If you buy directly, the rate reflects the cost of building, staffing and maintaining the sales centers and marketing costs.”
Many businesses prefer customers to interact with them electronically. This would reduce overheads since they wouldn’t need to employ many people to answer questions and give quotations. It was a common understanding that it was cheaper to buy vehicle insurance online than by phone or through intermediaries.
However, it is becoming commonplace that few companies may not see a reason for giving incentives, which essentially eat away profits. This goes to show once again that it is always necessary to compare and choose the best. And clearly, some of them make no bones about offering lower rates through this outlet. Furthermore, there are companies like Esurance whose business model is almost completely web based. They offer a totally different experience compared to traditional agent base transactions.
Is It Easier to Find Affordable Car Insurance Online?
It is a totally different experience and many people embrace it and like more than face to face or over the phone transactions. Dare to say, they may still choose it even if costs were equal. Here are some of the reasons why you have a better chance of finding cheap online automobile insurance.
- You can play around with coverage and get new quotes until you find the optimum balance between price and protection if you do it yourself. It may sound a lot of work but you should remember that it is lighting fast. It shouldn’t normally take more than an hour to make a decision. The beauty of it is that it is your time and you can decide when to stop, have a break and go again. It is almost certain that you will anger an agent if you keep asking him or her to make slight adjustments to coverage, deductibles or other details and start the search all over again.
- There is no limit as to how many quotes you can get. It is normal that every broker or comparison website has its limits. However, you can use two or three different sources and go direct as well. You can also, ask brokers to get quotes for you by filling their proposal forms on their pages without the need to see or call them. All these entirely different sources would increase the efficiency of a comparison-shopping that results in very competitive prices.
- You can check the effects of possible changes in life on your premium before they happen. For example, you can quickly get a quote and see how much the premium would fluctuate if you move to a different zip code. You can also get insurance quotes for a car you want to buy. This takes the guesswork out of equation and gives you real numbers to consider. Try asking an agent to give you estimates for a different car every other day until you decide on your new ride!
Many people actually choose the Internet to purchase auto insurance. Quite a few people prefer human-less transactions wherever they can get. They don’t want to talk to a broker face to face or tell their details. In a way, they are making own deals. They go through many alternatives, consider different companies and choose a policy that will fit their circumstances perfectly. When they need to change policies they can sign in to their accounts and make the alteration. They can submit claim and follow the process in real time as well.
It may be to do with personality as well. You may like to shake hands to seal a deal or you are a type of person who avoids contact. For now, you have the option of walking down the high street and talking to your neighborhood broker or open the laptop and get a few quotes. In fact, there is nothing stopping you to take advantage of both outlets and see which one comes on top. In other words, you can test if you can get affordable auto insurance online or an agent can do better. You can let the natural selection process work for you.