There are a growing number of companies in the U.S. offering to compare auto and other property and casualty insurance online. This follows a trend from the U.K., where nearly all auto insurance is now purchased online. Comparison shopping for car insurance hasn’t worked quite the same in the U.S. as abroad for a variety of reasons. Still, it’s clear that the trend toward online insurance comparison will continue.
Here are the questions you should answer before shopping for insurance online.
Who is getting paid and how
Most insurance comparison sites are what the industry calls “lead aggregators”. Lead aggregators’ business model is to collect your contact information and sell it. As you can see form the quote above, that contact is sold multiple times to multiple agents. It’s a great business model for lead aggregators but it’s terrible for both consumers, insurance agents, and carriers. The consumer is aggressively marketed to by multiple agents competing for the business. Agents’ know a race is on and that conversion is poor but they don’t have better options. Carriers find that they get disproportionately too many cut-rate shoppers.
Some companies will offer to compare “the other guys” and the business model isn’t to sell leads. Companies that compare competitors want to attract you directly. So why would any company make it easy to see their competitors’ rates? The reason is that they know most people want to speak with a professional before making a complex financial decision. When you go to a site offering to compare competitors they know they get the first, best opportunity to speak with you. It’s easy to take basic information and present general estimates that look like a level playing field. It’s quite another thing to bind insurance for each consumer’s unique risk profile.
Comparing underwritten quotes vs. rate estimates
Because your risk profile is unique it’s important to know about the accuracy of rate estimators. The more information you provide, the better estimate you will receive. Most comparison companies stop collecting info after a few basic questions but they also can’t give you a good estimate if it turns out your specific information is much different that statistical averages. Some comparison sites will tell you how accurate their estimate is based on how much info you are willing to give them, including sensitive personal information like date of birth, driver’s license number and Social Security Number. In all cases, it’s important to remember that you are giving all that information to the aggregator, not the insurance company.
How is your information handled and by whom
Applying for home and auto insurance requires sensitive, personally identifiable information (PII). No matter where you start, insurance almost always requires a credit check and a motor vehicle report and that means providing your Social Security number, driver’s license number, and date of birth. Are the sites you are using encrypting that data…everywhere? Your PII should be encrypted on the computer you are using to access the site, during transmission to the site, and in the database the site is using. (Yes, it most certainly is using a database.) In other words, your PII should be encrypted anywhere it is in transit or at rest. That way there are minimal chances for it to be stolen. Can you be sure the sites you are using are adhering to these practices? What about when you pass your data from the aggregator site to the insurance company? How is data handled then?
In fact, you may be required to provide all of that information to the insurance company again after you leave the aggregator.
What happens after you choose
Most insurance comparison sites stop after showing you their results. When they pass you to an insurance company they’re collecting the fee and leaving you to contact the company on your own and apply for insurance from the beginning. This might seem like what you want if you want to do things online and you don’t want to talk to sales people. But a weak handoff can be problematic due to all of issues we’ve described. Moreover, it’s clumsy and it doesn’t have to be that way. Why should you have to re-enter all of the same information you just provided to the aggregator? Why should the convenience of an online service stop at displaying a price tag? The aggregator should be able to pass your information directly to the insurance company you choose and help you connect with them. You should be able to purchase insurance and access evidence of insurance in the same place you shopped for it.
Comparity is different
There is only one place you can shop for and compare insurance while being assured that your interests are safeguarded. With Comparity, you fill out a single, secure application online to access 30 carriers. You talk to one person (when you want) and review side-by-side, “apples-to-apples” comparisons of underwritten quotes. All of your personally identifiable information is encrypted at rest and in transit and your contact information is never sold. We are also the only company that can present exclusive brands like Nationwide, Farmers, and Allstate in a side-by-side comparison. We don’t sell insurance and our compensation is the same no matter who you choose. Our Navigators are licensed, professional insurance agents whose only job is to help you make the right decision about insurance. By shopping for insurance with Comparity you have no reason to go anywhere else.