Buy Insurance Like You’re Buying a Car--Solicit Competitive Quotes From Multiple “Dealers”

When I was shopping for a car, I did a lot of reading about different makes and models in Consumer Reports, went to a few dealers to test drive the cars I was interested in, and then made a decision which car I wanted to buy.  So did I just go into my local dealer and start haggling over the price?  Nope.  I sent out emails to several dealers within a 30-mile radius, soliciting quotes on the make and model I wanted with the features I liked.  Within 24 hours, I got emails and phone calls back with quotes.  I had them bidding against each other and eating out of my hand!  I told Joe from So-and-So Honda that Abe from Up-and-Down Honda quoted a price that was $800 lower.  So Joe came down to beat that price.  Abe was not going to be undersold, and came down another $100.  But Pete from Up-the-River Honda wouldn’t hear of it.  He undercut them both and sold me the car for $250 less than Abe.  Okay, so I made up the dealer names, but I did buy a Honda Pilot and I did get a good deal by soliciting quotes and “working the system”.   You can do that with insurance, too, to a certain extent.  So don’t just automatically go with the State Farm agent down the street.  He may, in the end, be the one to give you the best price, but you don’t know that until you test the market.

Do your homework first
Before you set out on your auto insurance shopping spree, it’s very important to first be prepared with a consistent set of must-have items you need to include on your policy. This requires you to do some homework before approaching an agent or website to obtain your quotes so you are prepared to communicate the same consistent coverage wishes to all quote resources.  Questions such as: how much insurance do you need?  How much can you afford?  What collision and comprehensive deductibles would work for you? are important to answer before you get started. 

If you need assistance with figuring out what coverage you need and how much you can afford, here are some people/places that will help you, and you may wind up walking away with a quote from them, too:

•    Visit your local insurance agent.  For those of you who prefer face-to-face contact with a licensed insurance professional, a visit to a few of your local insurance agents can be a very rewarding experience. Since local insurance agents are typically experts regarding insurance in your area, visiting an agent can be valuable if you require professional guidance concerning your auto insurance needs. Note: Some agents are contract agents who work with only one insurance company, so if you do get a quote, it will be for insurance with that one insurer.  If you visit a State Farm or Allstate agent, for example, they are exclusively representing the products of their parent company. This is also known as buying-direct. By visiting a State Farm agent, you will walk away with a quote for auto insurance provided by the State Farm insurance company and no others.  Other agents are independent agents. They typically have permission to sell auto insurance for multiple insurance companies. Therefore, you can expect to walk away with quotes from multiple insurance companies. Before making an appointment to visit an independent agent, ask them how many and which auto insurance companies they represent. This can help you in your decision to choose the independent agent that can provide the most quotes for your comparison.  Either way, they can help answer your questions about the coverages you need to buy.

•    Connect with your inner online shopper.  If you prefer to shop for auto insurance from the comfort of your own home, there are many online resources that allow you to obtain quotes and even purchase your auto insurance through a secure online transaction.  E-options can either follow the buy-direct model or the independent model, just like with insurance agents.   If you decide to shop for your auto insurance quotes online, you can still find answers to your insurance questions because online resources have customer service numbers you can call while using their website.  Some even offer an online chat with a licensed insurance professional as you are proceeding through their quote questioning screens.

•    The best of both worlds. One of the greatest things about shopping for auto insurance is that there are so many options for obtaining information and quotes. If you’re not sure whether visiting an agent or using online tools is the best option for you, try both. Also keep in mind that there is often some cross-over between the two shopping channels because you can obtain an online quote from State Farm or Allstate and your local independent insurance agent may have a website where you can obtain quotes from the insurance companies they represent. Trying a mixture of both shopping experiences, can help you select the option that best meets your customer service needs and will leave you with the most confidence at the end of your transaction.

Be consistent
You should always compare apples to apples.  Don’t get a quote from one insurer for 30/60 liability coverage ($30,000 per injured person/$60,000 per accident), and compare it to a quote for 50/100 from another insurer; and comparing collision coverage with a $200 deductible with collision coverage with a $500 deductible will not tell you what you need to know. They are not the same.

Stick with consistent coverage options when obtaining your quotes and that will help you avoid comparing apples to oranges. With insurance, a lower quote can often translate into less coverage or a shorter policy term (for example, 9 months instead of 12 months) so you want to make sure you have that apple to apples comparison when you sit down to review your choices.

Shopping for auto insurance can be an intimidating and time consuming task, but equipped with the right information you will actually feel more confident and relieved at the end of your shopping experience.  I can’t promise the insurance companies will get into a bidding war for your business (like my car dealers did), but getting those multiple quotes will help you to be sure you are getting the best possible deal for the product you need.