Buying Car Insurance Online Vs. Agent

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Important facts to know...

  • There are several different ways that you can get auto insurance quotes when you want to buy a new policy
  • People who prefer to get face-to-face service will benefit from getting a quote from a licensed agent
  • Some agents will offer you quotes via email or by phone if you can’t go into the office during business hours
  • More and more consumers are using the Internet to get direct quotes any time of the day
  • Some online quoting systems have features that give the user tips on how to select the right level of protection

Some consumers like to shop at brick-and-mortar retailers, and others like how convenient it is to log onto the Internet to search for the best deals that will ship right to their front door.

The Internet has completely changed the way that all modern companies compete, no matter what industry they are in. The Internet is a platform that connects consumers.

The auto insurance industry is one marketplace that’s changed since the Internet has become a necessity instead of a luxury.

Since buying decisions are typically made based on price, competitors have to find a way to promote their products and attract a targeted niche to their products.

Some companies spend more advertising money than others on banner ads and commercials, and others hire agents to market themselves.

If you are looking for the most competitive, affordable auto insurance rates, start comparison shopping today by entering your ZIP code above!

Marketing Insurance Products Through Agents

When insurance became mandatory, most carriers would hire agents to build a book-of-business and sell products.

The agents would either be employed by the carrier, or they would be contracted and cover their own expenses. Both exclusive and independent agents would earn their income in commissions based off of the total premium of the policy.

Marketing Insurance Products Through Brokers

Brokers are a lot like independent insurance agents. They enter into agreements with carriers and sell products to the public. Instead of representing the carrier, the broker will represent their client in hopes of finding them the best deal for the highest level of protection.

Insurance carriers that market through brokerages pay the broker a commission for selling the company’s products. The broker might also charge their clients a brokerage fee for their services that must be disclosed.

Instead of binding coverage, the brokerage must contact the company to get a temporary binder issued. Asking for a temporary binder gives the company time to review the application before accepting the risk.

Using the Internet for Direct Sales

Agents who are driven by commissions will sell better than an employee who has no incentives.

While there are still agents who have their own offices and who work in district offices, a lot of carriers are choosing to do business are more modern and less expensive distribution channels. The best option has become the Internet.

Why are more and more insurance companies going online?

By creating their own quoting systems, insurers have found a way to promote their goods without having to rely on agents. It might seem like a less personable way to do business, but it’s a strategy that combats rising operations expenses.

Going online also expands the company’s reach to new markets.

By spending the money on a quoting system that’s found on the company’s official website, companies can drive traffic, deliver personalized quotes, and sell products directly to the consumer.

The systems are easy to use, and they can be accessed 24 hours per day, which gives today’s modern consumer the convenience factor that they prefer.

What is the advantage of doing business with an agent?

Some consumers would rather do business with a professional who has experience in the industry and who can help them find the best products and coverage options.

For people who don’t know insurance and who aren’t well versed in finance, the idea of navigating through all of the options alone can be intimidating.

Insurance agents have to complete training and pass a licensing exam that’s administered by the state before they can sell insurance products. Captive agents don’t even charge their customers for their recommendations.

The average person can get assistance building their insurance portfolio simply by choosing to buy insurance from a skilled agent.

What is the advantage of doing business online?

You may not get to speak with an agent who’s been licensed to sell insurance when you’re getting online quotes, but one major advantage is that you have the control. You control what time of day you’re going to go shopping and where you’re going to access the Internet.

If it’s a slow day at work, you can use the free time to find new insurance. If you want to get a quote late on a Saturday night, the system is available to you.

It’s the most convenient way to get estimates and effectively shop the market. Not just that, but it only takes five to 10 minutes to complete the quoting process.

Do online quoting systems explain what the policy will cover?

If convenience is going to cost you adequate coverage, it’s not worth it to shop online.

Luckily, more and more companies are revamping their systems to include features that educate the user while they are choosing coverage options or deciding whether or not they should reject them.

Many times, you can click on a question mark, or you can read through an article linked in the quoting tool to read up on coverage options and limit suggestions.

Only you can decide what type of coverage you should purchase, but having the educational feature in the tool helps give people the information that they need to make informed decisions.

Do you have to visit multiple sites just like you have to visit multiple agents?

If you’re going to visit an exclusive agent’s office, that professional can only give you quotes from the carrier that they’re licensed to sell through.

When you do business with an agent and you want to get multiple quotes, you’ll have to go from agency to agency to evaluate costs and make a choice.

If you’re visiting a website that’s managed directly by the company, you can only get quotes for coverage through the company. You’d have to find the URL to several different carrier websites and then print out your quotes so that you could look them all over thoroughly.

Luckily, that’s not the only type of system that you can use online.

There are websites out there where visitors can actually get more than one instant quote at once. The owners of the sites will reach out to carriers to make a plan, and the site makes its money by charging the insurance company money instead of the user.

Using this type of quoting system is a lot like doing business with an electronic broker. The only difference is you’re not paying the fee to use the system like you would if you were buying from a broker.

How often should you shop for auto insurance?

If you currently have insurance and you’re interested in looking for a lower-priced plan, you can switch carriers at any time. By law, no insurance company can hold you captive in a contract and require you to stay insured until the term is up.

The term protects you, but you still have the freedom to switch while not locking yourself in.

You have the option to change mid-term, but most recommend to wait until your renewal so that you can avoid early cancellation fees. There’s no reason to wait if you’re insured by a company that doesn’t charge this type of short-rate fee.

Just make sure that you’re making the effort to shop around and compare rates from time to time if you have a renewal coming.

Ultimately, it’s up to you to decide if it’s better to buy insurance online or through an agent. There are advantages to each option, but many lean towards the Internet because you can’t beat how convenient it is.

If you try to get a quote online just once, you’ll see why more people are skipping agencies altogether. Use your time as wisely as you can and enter your information in a quoting tool to get tons of instant car quotes in a matter of minutes.

Try our FREE online quote tool and start comparison shopping today for better auto insurance rates! Enter your ZIP code below!

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