Auto insurance agents, some say, are a dying breed. Nowadays, auto insurance is one of those service businesses that are becoming more and more dominated by Internet providers.
In truth, there's some question whether auto insurance agents are needed at all anymore. Do you really need to spend your Saturday morning visiting an auto insurance office to get pitched on a single car insurance company's policy when you can purchase auto insurance on the Web at any time - weekends, evenings, etc. Not only that, but buying auto insurance online enables you to compare the offerings of several companies side-by-side in terms of policies and premiums. What's more, you can buy the policy online (in most states), and even file claims on the Web.
One might well point out, of course, that many people simply prefer meeting and talking face-to-face with an insurance agent, rather than simply pounding a computer keyboard. For one thing, they may feel more secure about transferring money (premium payments) in person than on the Internet. For another, they may prefer having a knowledgeable individual they can communicate with and ask questions of.
But the number of people that feels this way is clearly on the decline. According to market research firm ComScore, 67.5% of 2,000 U.S. consumers surveyed last year said they would consider purchasing their next auto insurance policy online. Auto insurance purchasing on the Internet has been growing at an amazing 55%+ rate over the past couple years.
Therefore, whether you're looking for a replacement policy or for your first auto policy, online auto insurance provides a number of benefits: speed, convenience, cost savings, and better information about available policies from a range of insurance providers.
Even so, before signing up for a policy, whether in-person or online, make certain you're familiar with the basics of auto insurance.
Essentials of Online Auto Insurance
If you drive an automobile in the U.S., you need insurance. That's an obvious fact. But what kind of insurance and at what price?
Liability insurance. There are two basic types of liability insurance, bodily injury and property damage. If you buy a 25/30/30 coverage that means the insurer pays up to $25,000 for bodily injury per person, $30,000 for bodily injury per accident, and $30,000 for property damage per accident. So this would be a relatively moderate amount of coverage, and you must assess your own situation in deciding what level of coverage is best for you. All states, except Wisconsin and New Hampshire, require that you carry liability insurance.
Collision. Collision insurance covers your property damage and medical expenses in an accident in which you are at fault.
Comprehensive. This type of coverage provides reimbursement for loss from accidents other than collision, or from theft, for example property damage sustained from fire, flood, or vandalism.
Uninsured/underinsured motorist. Pays you if the other driver in an accident does not have enough insurance or does not have any insurance. (It's not required in all states.)
Personal injury protection. PIP, as the industry calls it, pays your unrecovered medical expenses as well as lost wages resulting from an accident. PIP may also include a death benefit. (About 16 states now require PIP coverage.)
Many people are confused by so-called "no-fault" auto insurance programs. Simply stated, in a no-fault system, all drivers pay their own accident costs, no matter who is to blame. It was for a long time thought that this system would reduce litigation thereby holding down costs. It didn't happen. In fact it usually resulted in higher accident rates, higher costs, and higher insurance premiums. As a result, most states that had enacted no-fault laws repealed them (DC, NV, NJ, PA, GA, CT, CO, FL). leaving only Kansas, Michigan, Hawaii, Massachusetts, Minnesota, New York North Dakota, and Utah. However a couple states - New Jersey and Pennsylvania - adopted "choice no-fault", allowing drivers to choose between no-fault and a traditional policy. (Results, in terms of premium levels, have been mixed so far.)
Keeping Your Premiums Down
To the typical consumer, insurance companies may seem to have some odd ideas about what factors to consider in setting your insurance rates. For example, I once found my rates increased after another driver hit my car, and when I called the company, and told the rep that the accident had not been my fault, the customer service rep answered, "But you were in the wrong place at the wrong time."
That is, fault is not the question, it's all a numbers game, and there's no real effort to achieve equity in setting rates. So to win the game you have to provide the company with numbers that will result in reasonable premiums. Some of these you have some control over and some you don't. Among the factors that will be taken into account are: age/gender (single males under 25 get higher rates; women generally get lower rates); location (New Jersey and California rates are high; urban rates are higher than rural rates; many companies now even look at your zip code); driving history (if you've filed one or more claims in the past five years, this will boost your premium significantly; so will a speeding ticket or other violation, even if no claim was filed); amount you drive; type of car (expensive cars get higher premiums, so do cars with high rates of theft, like the Toyota Camry and Honda Accord; so do off-road vehicles and SUV's).
Choosing an Auto Insurance Company on the Internet
If you run a Google, MSN or Yahoo search for "car insurance" or "auto insurance" you'll see that this is a crowded business on the Internet. There are literally hundreds of companies advertising auto insurance online. However your best bet is to use one of the companies which allow you to order online, like Esurance.com or InsureMe.com.
You'll soon notice that each online insurance company has its own little qualifying process and series of screens it forces you to go through before it give you a quote.
Esurance.com is a good example. It starts by asking you for your zip code - an easy enough question. Then on the ensuing screens they request detailed information -- How many cars you are insuring. How many drivers. Year/Make/Model of your car. Uses of your car. Discounts for which you may be qualified, such as airbags, antilock brakes, car alarm, etc. Coverage you are looking for. And so forth.
The Esurance.com application process is actually fairly simple, and takes only a couple minutes - after which you're provided with a specific quote from Esurance.com, which is a virtual (online) insurance provider.
By contrast, another website, InsureMe.com leads you through a somewhat similar application process, but ends without supplying you with a specific quote. Instead, it lists several brick-and-mortar insurance companies which will contact you later, either by email or phone, with specific quotes. This has the advantage that you will be able to compare policies and quotes, and the disadvantage that you will have to wait awhile for the companies to contact you.
Other auto insurance aggregators (as they are called) have other processes -- some, for example, run your credit report as part of the process.
In any case, as a final step in choosing a policy, you may want to take a little time to check out your selected insurance provider at AMBest.com, particularly if it's one you're not familiar with. To do so you'll have to create an account on AMBest.com to look up an auto insurance company's rating, but it's fairly simple to do so. Once you've created your account, click on "rating and analysis" and input your company's name. Companies are assigned a letter grade from "A++" downward. You'll definitely want your selected company to have at least a "B" rating, which is "good."
Incidentally, even if you already have what you think is a reasonably-priced policy, it's usually still a good idea to apply online to see if you can get a better premium rate. After all, there's no obligation and it only takes a couple minutes. According to a recent survey of consumers by the industry publication EDP Weekly, one in three people who shopped online for auto insurance and then bought a new policy saved more than $500 with some saving $1,100 or more.
Auto Insurance Online In
Often, saving time and money on your auto insurance, whether you are an experienced driver or have just passed your drivers test, can come down to just knowing a few simple basic facts; with just a little information on the subject, massive savings can be made each and every year. Coverage varies dramatically depending on what you require but is primarily dependant on the available budget. Some of the components of auto insurance are:
- Theft of vehicle
- Medical payments coverage
- Comprehensive coverage
It wasn't that long ago that getting a quote from an insurance company meant a visit to their office and would have to be repeated for a number of quotes. Fortunately those days are past because now it is just a simple matter of using an online comparison site without leaving your home; this is probably the easiest way to find a policy within your price range. If you're interested in slashing your bill in half then there's no reason why you shouldn't consider purchasing insurance online; this will be the most used method normal way to do this as modern technology advances.
There are a number of factors involved in determining the cost of your premium; this almost always includes information on the following nature:
- The city or town where you live
- Whether the vehicle is garaged or not
- The costs for parts and labor to repair
- The size and performance of the engine
The possibility of a claim made to the insurance company increases dramatically when someone lives in the city. It's a pretty safe bet though that you'll pay more for your auto insurance policy if you live in a big city when compared to a nice farm out in the country; There was a time when you had to pay your premium up front but most reputable companies will allow monthly installments these days which should help soften the financial strain. If your insurance is up for renewal you are advised to get the quotation arranged in well in advance of the old policy expiring.
Sports cars and other 'high risk vehicles' normally need a comprehensive policy but these are expensive and you may only be able to budget for a basic liability policy. The advantage of having a comprehensive plan is the insurer will pay for any medical bills and time lost from work even if the accident was the insured fault. Insurance coverage with this type of policy also extends to the driver and passengers of both vehicles providing they are not related by blood to the driver that caused the accident.
It is not a good idea to change auto insurance companies in mid policy but best to wait until the existing plan is about to expire to ensure a smooth transition. Never rely on the fact that because you have applied for a policy that it will be accepted and cancel an existing plan before this confirmation is received. If your new insurer offers an arrangement whereby they can reduce the cost of the premium if you have your home protected with them as well, it is well worth considering. Although a great deal depends on individual circumstances, almost everyone can reduce the cost of their auto insurance if they just spend some time researching all the options available to them.
Both Joseph Ryan & Kay Brown are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
Joseph Ryan has sinced written about articles on various topics from Legal Matters, Auto Insurance and Criminal Defense Law. Joseph Ryan is editor of Web Search Guides (http://www.websearchguides.com), which provides online research guidance on a wide variety of topics of current interest.. Joseph Ryan's top article generates over 9900 views. Bookmark Joseph Ryan to your Favourites.
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