With the rise of the Internet and the search engines, you would think that buying auto insurance online would be more commonly used method than it is today in the United States of America. There are plenty of options including buying through a broker, a direct agent of a large insurer, through aggregator websites and through a direct policy purchase online with the insurer. So, how to buy your coverage and what would your choice be?
Traditional Method of Purchasing Automobile Insurance
Before you could easily and conveniently get a dozen quotes delivered directly to your email within minutes of filling out an online quote form, many Americans would have to contact a local agent of an insurer or an insurance broker. These two agents differ in their features but in essence the buyer would need to go to their office, sit down and have a conversation regarding his/her situation and be presented with a written offer.
This of course offers benefits and detractors. First, if you are looking to shop around and get multiple quotes, most people simply do not have the time or patience to go to 10 different insurers to get a quote. A broker could offer quotations across multiple companies, yet again they are doing the research on the back end, and it does not offer the transparency that most buyers want today. That is one of the main reasons why the online comparison shopping marketplace was developed.
How to Buy Car Insurance Online
The online marketplace, offers the same choices, yet with much more convenience. Simply sit at home on your porch with a coffee and a tablet and explore your options. You can still get quotes from local agents or you could opt to use an aggregator quote comparison site, such as CheapAutoInsurance.net., and get multiple car insurance quotes from multiple insurers.
Fill out the same information in the online application and it gets sent to multiple companies and they provide a quote based on the same information. It provides the best apples to apples comparison in the industry today. If you call agents you may give different information and there may be different prices based on these differences.
You could also approach the major insurers online for direct auto insurance quotes. However according to Neil Rekhi, founder of a property and casualty market intelligence company, buying direct does not give the insurer any incentive to win your business with a competitive quote. It would be better if the quote comes from a third-party aggregator, as the insurer knows it is then competing for your business directly.
Buying Vehicle Insurance Online vs Traditional Approach
It is interesting to note that in the United Kingdom (UK), 75% of car policies are now bought over the Internet with only 25% being sold in person by an agent. Part of this is due to the decreased regulations and lack of agency networks in the UK in comparison with the US. However, in countries with similar regulations as the U.S., such as Spain and France, their online marketplaces have been growing substantially in the last few years. Spain jumped from 4 to 13% in just three years, while France’s online policies jumped from 3 to 11% from 2010 to 2013. Even though the U.S. lags in comparison to these countries, it is expected that purchasing car insurance online will continue to grow.
There are several aspects to consider when choosing coverage you need. Generally, people look at two aspects which are paying for the premium and getting paid for the damages they suffer or make others suffer. It is understandable that you would only want to buy cheap liability only car insurance when you don’t have enough money to even pay for the cheapest policy. That is why it may not be realistic to look for a type of policy that would be over your budget because you may struggle to pay the premium in the future that may lead to cancellations.
However, it is important to determine the coverage you need and try your hardest to get it at affordable prices. This post titled how to save money on car insurance can help you find all the discounts you qualify and reduce your premium. Most policyholders in the US buy full coverage auto insurance with 72%. A full coverage policy combines decent liability coverage with collision and comprehensive coverage. You also get uninsured motorist coverage where your state requires it as part of liability coverage or where your insurer offers it as a package.
Generally these full coverage policies are reasonably prices and most motorists can afford them. If you have good driving records, no claim and good credit history you may be able to get your policy cheap. If you are thinking of buying liability only coverage you shouldn’t just buy the state minimum coverage but have decent protection against third party claims.
We looked at this topic in several angles already and we keep coming back to premium costs. So, we should look at how carriers determine your rate. There are key areas they look at before they offer a quote. These are details of the drivers and the vehicle to be insured and coverage required. There are 20 – 30 factors considered in between like, your credit score, driving and claim history of all the drivers listed, where you live and work and so on. Knowing all these factors will help you plan ahead and reduce your premium gradually.
Another important point to note is that every company calculates premiums differently and offer different discounts at different rates. What you need to look at when buying car insurance is the final quote you receive from a particular insurer. And you should always compare it with other quotes you got based on same coverage.
The one major issue of contention is providing enough consumer education for you to make the right decision on which coverage to get, car insurance discounts to ask for, and all the other intricacies that go along with the decision. Here at CheapAutoInsurance, we are striving to make the decision easy by providing a continuing stream of informative and helpful blog posts to give you the latest information on everything from the cheapest cars to insure to the most expensive ‘oops’ you might forget to include in a policy. So would you want to buy cheap auto insurance online or leave it to a broker next time?