Buying Auto InsuranceOnline Is Still A Crapshoot
While a dedicated and sophisticated auto insurance buyer with lots of time on their hands can probably find a good rate online, most cyber-consumers are still at the mercy of a variety of question sets and rating engines that can yield widely divergent quotes.
As a result, consumers are literally rolling the dice and hoping that whatever quotes they can get wont leave them significantly lighter in the wallet.
This was the conclusion I reached from this years foray into the world of buying auto insurance online. Nearly a year after my last effort, I found that online quotes for the same risk varied by more than 200 percent, versus 188 percent and 300 percent in the previous two surveys.
In my last survey (August 2001), the lowest and highest quotes on the same risk differed by $768, but in the 2002 survey, conducted in June, the lowest and highest quotes differed by $633 (six-month rates), a slight improvement in consistency. Still, a difference of $1,266 per year is significant for most consumers.
As in the past, the purpose of the current survey was to sample the experience of searching online for auto insurance quotes from the consumers point of view. Quality and responsiveness of the sites, as well as the actual quotes, were of primary concern. The findings here are in no way intended to rate the marketplace sites or the auto insurer sites we visited.
In searching for quotes, I laid down parameters that could be used at each of the sites. Since I reside in New Jersey, where many companies will not write auto business, I reported that I was moving to Kentucky. I used a real street address in Lexington, taken from a random business card in my Rolodex.
I pre-selected numbers for bodily injury and property coverages, along with medical expenses, deductibles and other figures needed to get quotes. The same numbers were submitted at each site, within the limitations of the question fields I found. There were, however, notable differences in the questions asked at each site.
With the preliminaries taken care of, I began my journey into the online insurance marketplace, looking for auto quotes on my trusty 2000 Toyota Celica GT.
My first stop was at InsWeb (www.insweb.com), which maintained its past record of being responsive and easy to navigate. Here I noticed that the "marital status" category had expanded, including such choices as "divorced parent with primary custody." And while most sites asked about accidents/violations from the past three years, InsWeb wanted to go back five years.
Another interesting part of the InsWeb question set was that the aggregator applied a discount if I was a graduate of a two- or four-year college or technical program. I decided to say that I was.
I received two instant quotes from InsWeb–one from Amica for $1,392 (12 months) and one from Progressive for $600 (6 months).
Next on my journey was Insurance.com (www.insurance.com), an insurance agency affiliated with Fidelity Investments. Here the only choices offered for online auto insurance quotes were Amica and Progressive. Clicking on the Amica link sent me directly to that insurers site.
At the Amica site, I went through a fairly lengthy set of questions. It was notable that under "security options," I actually had several of the protections listed, but I was only allowed to select one. Also, I was only allowed to select either $0 or $75 under "towing," where I had determined I was going to ask for $50 per day.
Imagine my surprise when, at the end of this process, Amica refused to offer me an online quote. They said they needed "additional information" and invited me to call their toll-free line where a customer service representative would be "happy" to give me a quote over the phone.
I wondered why Amica didnt need that additional information when they provided a quote via InsWeb only moments earlier.
Back at Insurance.com, I clicked on the Progressive link and was taken to their Web site. With little effort I received a six-month quote of $576. A subsequent e-mail told me that if I paid the entire amount up front, the rate would drop to $500.
When I asked for comparative quotes, a feature for which Progressive is well known, I first had to spend five minutes answering additional questions. Once that was done, I received the following six-month quotes: $386 (Allstate Insurance Company); $941 (Allstate Indemnity Company)–the highest quote I received anywhere; $587 (Nationwide Mutual Insurance Company); and $308 (Kentucky Farm Bureau)–the lowest rate I saw anywhere.
Next stop on the Information Highway was Esurance (www.esurance.com), which said it did not offer quotes for Kentucky, but provided a link to its partner NetQuote (www.netquote.com), which does.
NetQuote had quite a lengthy question set, including some queries I hadnt seen elsewhere. For example, they wanted to know if I was a smoker, if I had a good credit rating, and if I had health insurance.
One mildly annoying problem was that when I used their drop-down menus to indicate that I had been insured for "7-plus years," the rating engine still insisted that I fill in the "months" box. I threw a random number in and was on my way.
NetQuote did not provide instant quotes, however, stating that it prefers to take four days to deliver a rate. I indicated that I was in a hurry and was told "you may receive a quote from Progressive." That didnt happen, but I did receive a six-month quote of $527 via e-mail from a Nationwide agent the next day.
On its opening page, Quotesmith.com (www.quotesmith.com) said I could get "comparative quotes from several top companies." Unfortunately, I received only one 12-month quote of $1,390 from Hartford Financial Services.
Quotesmith also had some interesting quirks in its question set. Under "marital status," the drop-down menu featured the option, "domestic partner." The possibilities there were mind-boggling, so I just moved on.
I was also asked to state the number of miles on the odometer when I purchased my car, and the number currently there. Unfortunately, the rating engine wouldnt accept "0″ as an answer for the first part, so I had to go back and put in a larger number.
Under "vehicle body type," the drop-down menu asked me to make choices regarding my brakes and seat belts, which was a bit confusing.
I also visited some carrier Web sites directly to get quotes. I received six-month quotes of $451 (SAFECO) and $583 (Allstate Insurance Company). State Farm, with whom I actually do have my insurance, would not accept the Kentucky address I had used at all the other sites. Id like to think thats because the companys systems recognized me as a current customer, but I had no proof of that.
The bad news for online auto insurance consumers is that not a lot has changed in the past year. It took more than two full work days to get the quotes listed here, and most consumers will probably not have that kind of time or patience. That leaves them at risk of paying hundreds of dollars more for the same coverage they could get elsewhere.
Until and unless some way can be found to standardize question sets and to offer true comparison rates, our advice to consumers remains the same. Shop online to get a general idea of prices, then consult an agent who can fill in the details and provide an accurate quote.
Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, July 1, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.
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