Have you seen the commercials for buying your insurance online? It sounds pretty straightforward, especially given the fact that most of us shop online anyway right? As experienced agents with our client’s best interest in mind, we want to discuss some of the caveats that can come with shopping for your insurance needs online.
America’s Online Shopping Trends
Americans have become adept at shopping online, buying items as personal as clothing and jewelry, or home needs such as mattresses and furniture all with a few keystrokes. This is not surprising seeing how rushed for time most of us seem to be and the ease at which our smartphones seem to make this process.
Consumers spent $517.36 billion online with U.S. merchants in 2018, up 15.0% from $449.88 billion spent the year prior, according to a new Internet Retailer analysis of industry data and historical U.S. Commerce Department figures. That’s a slight slowdown from 2017, when online sales grew 15.6% year over year, according to Commerce Department figures. (Source: Digital Commerce 360)
The ecommerce way of shopping works wonderfully for some industries such as retail industry. Sometimes, however, what you are shopping for is better done in person in order to take advantage of first hand information and the expertise that can only come with a real human answering your questions in real time, face-to-face. Buying online insurance is one such instance.
Consumer Reports has completed many studies on overall satisfaction of insurance policyholders and how and where they purchase those policies. One major finding has shown that buying from the bigger companies is not necessarily better. Sure, these companies have brand recognition, and the catchy commercials and jingles to match, but the smaller companies seem to be faring better for their clients.
One of the factors for this is specific to the insurance industry. Consumers want a company that will stand behind them when a crisis hits, whether it is: the need to access a life insurance policy after the passing of a loved one; the reviewing of a car insurance policy after an accident, or the reimbursement of a homeowners policy after damage to the property.
Buying a policy online may be easy, but many consumers realize that when a tragedy strikes they want to know the agents who will be helping them. Because of this, online providers have yet to outdo the local insurance agent.
Disadvantages of Online Insurance
There are numerous caveats to be aware of when buying insurance online. Here are some of the top issues with buying online as told from clients who have previously struggled with this situation.
- No personal relationship with an agent. This is important especially when a claim needs to be made and you have no human connection to a company.
- No one guiding a consumer through the claim filing process. Knowledge is key in understanding what needs to be done to access an insurance claim. Filling out forms online requires some level of knowledge of the policy as well as computer know-how.
- Since many online agents do not offer homeowners insurance there is no multi-policy discount that can be applied.
- While many online sites have chatbots to answer questions quickly, without knowing you and your situation it is hard for those “bots” to answer specific questions about your claim.
- Gaining access to a live agent online can be difficult.
If you are considering taking the leap into online insurance for your car, home, or life insurance, be sure to learn exactly what the pros and cons are when compared with the traditional route of an insurance agent.