The proliferation of insurance websites has made it easier than ever to buy car insurance online. However, if you’re not careful, you can end up with the wrong coverage. Here’s what you need to know about buying car insurance online and the differences between shopping online vs. with an agent.
In this article:
How do you buy online car insurance?
The most common choices for buying car insurance online are purchasing it directly from an insurance company’s website and using an insurance comparison site.
With either type of site, you usually begin by entering information about yourself, your household and vehicles into an interactive form. Most sites also offer live assistance, by phone or online chat, to help you along.
After this, the process is slightly different on an insurance company’s site than it is on a comparison site.
Online insurance companies
As you enter information into an insurance company’s online form, the system often pulls information about your vehicle and existing insurance, which you can confirm or edit, from industry databases.
After you finish entering the requested data, most sites provide quotes for a few different insurance packages. They also let you see how your potential rate may change if you adjust your deductibles and policy limits, or add or remove optional coverages such as collision, comprehensive and medical payments.
If you see a proposal that you like, you can proceed to “buy.” At this stage, the system usually runs a final check of your driving history. If it finds an incident that you have not already disclosed, your approved rate is likely to be higher than the quoted rate.
Your purchase usually is not final until you accept the proposed coverages and rate and provide your payment information.
Insurance comparison websites
Insurance comparison websites come in different forms, but they generally allow you to compare rates from multiple companies at once.
In addition to requesting information about yourself and other drivers in your home, the systems typically prompt you for details about your vehicle, driving record and the insurance coverage you need.
Many rate comparison sites instantly provide quotes from multiple insurance companies. If you see a quote you like, you can usually follow a link to the corresponding insurance company’s website to learn more and/or complete your purchase.
Other comparison sites forward your information to insurance agents in your area, who follow up with you by phone or email to further customize your quote.
| Experience | Online insurance company | Insurance comparison site |
|---|---|---|
| How it works | Enter information online to obtain a quote and buy. Most also offer live assistance. | Obtain quotes from multiple companies, instantly or as agents contact you. |
| Advantages | Shop on your own schedule, at your own pace. | Compare potential rates from multiple companies. |
| Disadvantages | You need to visit multiple company sites to compare rates. | Sites don’t always have updated rate information for every company. |
When shopping online, make sure to only use sites that use the latest data security protocols, including encryption technology, to protect your personal information.
Compare quotes from top companies to get the cheapest car insurance
Is it a good idea to buy car insurance online?
It’s relatively easy to seek car insurance quotes online, but it’s usually only a good idea to buy your policy online if you understand how the different coverages in car insurance work and know exactly what you need.
Insurance can be confusing, and it’s easy to overlook coverage that you may not know about or understand when you shop online.
Online insurance companies usually provide live assistance and information about various insurance topics on their websites, but an agent can often give you more time and attention.
If you already understand how insurance works and know exactly what you need, shopping exclusively online can save you time and, possibly, some money.
Companies such as Esurance, GEICO, Metromile, Progressive and State Farm are among those that offer a fully online shopping process.
Several other companies and agencies allow you to obtain a quote online. However, many of these refer your quote to an agent, who follows up with you by phone or email to complete the process.
Buying auto insurance online vs. from an agent
Buying car insurance online gives you the convenience of shopping on your own time, while buying from an agent allows you to ask questions and get recommendations from a licensed insurance professional.
Since online insurance companies offer live assistance, while agents are expanding their digital services, it’s becoming easier to integrate both channels into your shopping experience.
Customers sometimes assume that online car insurance is cheaper than buying from an agent, but this is not always the case.
When companies sell insurance directly to consumers online, they can avoid adding agent fees to their rates.
However, your premiums are determined by several additional factors, including your age, driving record, insurance history and credit. Since insurance companies weigh each factor a little differently, you may qualify for better rates from an agent’s company than you do from an online insurer.
The best way to find out for sure is to compare rates from multiple companies, including online insurers and agents.
| Channel | Advantages | Disadvantages |
|---|---|---|
| Online car insurance | Shop anytime, at your own pace. No sales pitches. Cheaper rates are possible, but not guaranteed. | Not as much professional guidance as agents can provide, though most offer live customer service. |
| Buying from an agent | A licensed professional can provide expert advice and service your policy on an ongoing basis. | Usually only available during normal business hours. Sales pitches and follow-up calls can become tiresome. |
Do I need an agent for car insurance?
While online car insurance is becoming more common, there are certain situations in which you need an agent to complete your car insurance purchase.
- Some companies only allow you to initiate a quote online. After you submit your quote request, you work with an agent.
- If you need to insure a custom, antique, exotic or other rare vehicle, you usually need to work with an agent to obtain classic and collector car insurance.
- It’s also usually better to work with an agent when you have unique or complicated insurance needs. Some online companies allow you to combine your car insurance with renters or homeowners insurance. If you also have a rental property, small business, boat and/or motorcycle, it may be difficult to obtain insurance for all of these items online.
As you shop, it’s also important to know that there are different types of agents.
Captive vs. independent insurance agents
Most insurance agents work in either captive or independent settings. Captive agents represent one company, while independent agents are authorized to sell for multiple companies.
Allstate, Farmers and State Farm are among the major companies with captive agents. Progressive and Travelers are among those whose products are available through independent agents.
| Setting | Captive | Independent |
|---|---|---|
| How they work | Sell insurance primarily for one company. | Authorized to sell for multiple companies. |
| Advantages | In-depth knowledge of their company’s products, including discounts. | Can compare rates from multiple companies for you. |
| Disadvantages | You have to contact multiple companies and/or agents to compare rates. | No access to products from companies that use captive agents. |
Combine the advantages of online car insurance and agents
Since quotes are free and don’t affect your credit score, it’s relatively easy to incorporate the advantages of both online car insurance and agents into your shopping experience.
If you have questions about your car insurance needs, you can go over proposed coverages and rates with an insurance agent and get a quote. You can then compare this quote to others you find online, as well as those from other agents.
Another way to combine the convenience of online insurance shopping with the service of an agent is to obtain a quote online and share it with agents to see if they can offer a better deal.
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