Why Buying Direct Car Insurance is Like Flying Blind
Ryan Hanley|October 28, 2016
If you own a vehicle, you need to carry auto insurance. Every state has specific laws related to the minimum coverage amounts, and many drivers opt to purchase even higher levels of coverage. When you are in the market for car insurance, you will discover that you have a lot of decisions to make. You must decide how much liability coverage is adequate to protect your finances, how high you want your deductible to be, and most importantly, how you want to buy your coverage. While many drivers choose to work with an insurance agent when purchasing their coverage, others prefer to buy their insurance direct.
What Is Direct Car Insurance?
When people talk about buying direct auto insurance, they are referring to purchasing coverage directly from the insurance company without the assistance of an insurance agent. This can be done by calling insurance companies on the phone, but most people prefer to do it online by visiting the websites of various auto insurance companies.
The process involves providing the insurance company with your personal information, including the vehicle identification numbers (VINs) of all the vehicles you wish to include on your policy, the coverage amounts and options you wish to purchase, and personal information about you and the other drivers in your household you wish to include on the policy. You can receive a quote for coverage in a few minutes and then purchase your coverage by the phone or through the website.
The Advantages of Purchasing Car Insurance Direct from the Insurer
To be sure, there are certain advantages to purchasing your coverage direct, which is why some people prefer to go this route. These advantages include:
The process is convenient. You can do your shopping for coverage without even changing out of your pajamas. The internet makes it easy to visit several websites so you can collect quotes from a variety of insurance companies. Bear in mind, however, that the initial quotes you receive online are subject to change once the insurers have completed checks on your driving and claims history, and, in many states, your credit score.
You may be able to get your policy cheaper. There are savings to be found by eliminating the middleman, provided you are certain about the coverage you wish to purchase. Insurance agents provide a service and there are costs involved , which usually means a nominal fee added to the price of your coverage. When you buy direct car insurance, you can avoid this added cost.
The Disadvantages of Direct Insurance
While the advantages of buying coverage without the help of an agent are compelling, consumers should beware of potential pitfalls when buying direct auto insurance.
You may find it difficult to get answers to your insurance-related questions. Auto insurance comes with a lot of options, and the choices you need to make can sometimes be confusing. Do you really need comprehensive coverage for your older vehicle? What is meant by full-tort and limited-tort coverage, and which is right for you? How much liability insurance coverage is enough to protect your family’s finances?
When you buy auto insurance direct, you may find it difficult to get the answers you are looking for. If you are a first-time policy buyer or if you have a lot of questions about your coverage, you may find it advantageous to work with an agent.
You may end up paying for coverage that is not in your best interest. Insurance companies are in the business of up-selling their products, whereas independent insurance agents are working for you. A Trusted Choice® insurance agent, for example, can help you understand your various coverage options, so that you can make an informed choice about whether the benefits of purchasing them make up for the costs. This can ultimately save you money by helping you avoid purchasing coverage that isn’t necessarily right for you.
You may be inundated with sales calls, mailers, and email messages. To get your insurance quotes online, you must submit contact information. If you are shopping around for the best price, you may end up providing this information to a lot of different insurance companies. Be prepared for them to follow up with you. Each company will want to make the sale, so they may not give up easily. Expect phone calls, emails, and even direct mailing from the insurance companies you looked into. When you work with an independent agent, your agent does the shopping around for you so you do not have to deal with the hassle of sales calls.
You may purchase a policy that does not provide the coverage you thought you had. This is the biggest risk of buying direct car insurance. Policies include a lot of fine print that an agent can explain but that you might miss when purchasing coverage direct. For example, if you have a housemate, you may not think to mention that when purchasing your coverage online. However, if you let that person borrow your car and they are in an accident, you may not have coverage, since all members of your household with access to your car must be included on your policy. Insurance agents can help you be certain that you will have the coverage you expect when you need it.
You may miss out on potential discounts. Insurance agents are aware of discount opportunities, such as if you insure a second car on your policy or if you have a teenage driver with good grades. If you purchase your insurance direct, you may not be aware of these potential discounts and might end up paying more than you need to.
Choose the Option that Is Right for You
When determining whether you should purchase your auto insurance policy direct or through an agent, there are no right or wrong answers. While some people feel comfortable enough to forgo the assistance of an agent, others find working with a knowledgeable professional to be very helpful. In many cases, the money saved by purchasing a highly suitable policy makes up for the slightly increased costs. Ultimately, of course, the decision is yours.