April 28, 2009

Is Online Auto Insurance the Future?

Let’s face it, the web is here to stay and has changed the tide of how we do business with companies of all sizes. Decades ago, it would have been hard to imagine that there would be other choices than a local insurance agent when someone needed to insure their car.

These days, we have local agents, large insurance companies, and aggregators all vying for our business. On top of that, we see them all advertising on the radio, TV, print, Internet and more. As more and more people get broadband Internet connections and seek to find the lowest prices on car insurance, the Internet will become the natural destination to find the lowest rates. By eliminating the local agents (middleman), consumers can go direct to the big companies and find lower rates because there is no commission or mark up involved. Online auto insurance will continue to grow because consumers can compare prices from multiple companies, get the lowest rates and do it all without a pushy salesman presenting options that may not be the best for them. On top of that, there is something to be said about saving paper and “going green”. Filling out insurance applications and claims online absolutely helps the environment.

As the big insurance companies keep spending more and more money on advertising to build their brands, consumers will continue to shop generically for auto insurance online. This will create an interesting dynamic. The question is – what percentage of auto insurance will be purchased online in 5, 10, 20 years? Only time will trend but the Internet seems poised to grow going forward.