Buying car insurance from an agent vs online

Dinesh by Dinesh Mittal

Published Tue, Sep 12th 2017, 10:12 | Finance

When you buy a car, it is mandatory to buy an insurance policy with it. You are not legally allowed to drive a car without getting car insurance. Whether you are buying insurance for a new car or you want to renew the insurance policy, the time is right to look for options. We are living in the age of internet and it is now much easier to find and compare products online. The good old way of buying insurance via an agent has a substitute now as you can buy car insurance online as well. But there are pros and cons to both methods. We have compiled a list of pros and cons of buying insurance online as well as via agent so that you can make the firm decision.  

Buying insurance from an agent: First of all, let me explain how buying insurance from an agent works. When you call an insurance agent, you are going to get into one-on-one interaction with a representative of a particular insurance company. He will come to your place and will ask you a series of questions about the car, model, price, engine type etc. and also will inquire about your personal life. The questions about your health, marital status, income etc. are important because they will give him an idea about what will suit you the best. He may also ask you about the additional add-ons you want to take and will explain what addon is better and why.

Pros: A lot of insurance agents or brokers are working with multiple companies and they will give you the best possible quotes from different companies. They can offer you discounts and provide complete information about the add-ons which will be beneficial for you in the long run.

Cons: When it comes to brokers, they are always in good terms with one or two companies and they may influence your decision to favor that particular company. In such cases, it is not necessary that the policy offered or kind of forced upon you by him will suit you the best. Also, there have been cases where insurance agents have taken the money from the client but never paid the same to the actual insurer or informed him about the policy. As he is the middleman, the cost of the policy will be higher as the company has to pay him the salary, commission or the profit share.

Buying insurance online: When you are purchasing insurance online, you are going to deal with the company itself. There is no middleman involved and the process will be based on person-to-computer interaction. You will fill out the forms and the computer will generate the insurance policy for you. The online system has got advanced and it can also suggest add-ons in case you miss to check them.

Pros: When you are buying insurance online, there is no middleman. The company can offer you a discounted price and also some offers on add-ons as well. Also, there is no chance of any type of fraud in the case of online insurance policy purchase. There are websites which help you in comparing insurance policies without being biased for any particular company which makes it much easier for you to choose the best possible option.

Cons: When you are buying insurance online, you are on your own. If you make any mistake, you are going to stick with it for one whole year. Also, if you do not compare insurance policies you may miss the chance to buy an insurance policy at a lower price from another company.

So, which is better?

Actually, both are equally good in different circumstances. If you are looking for a one-on-one interaction and want someone to explain everything to you, then go for an agent. On the other hand, if you are looking for discounts and best possible offer without any middleman’s interference, then it is better to choose the car insurance policy yourself and buy it online.