When consumers purchase insurance online they may be duped into believing that all of the policies and carriers are the same and the only difference is price and that can be a big mistake!
Insurance policies have different coverage’s, limits, discounts and features and unless you are well educated in insurance you may fall prey to inadequate or improper coverage and limits. Online policies do not help identify the consumers loss exposures and this can leave their assets dangerously exposed. Risking your largest assets to an online insurance carrier is dangerous and generally benefits the insurance carrier rather than the consumer. Consumers should seek the advice of a licensed insurance agent or broker when shopping for insurance, so they are well informed about what exactly they are purchasing.
The online insurance consumer tends to focus strictly on price and may not understand that the lowest price equates to inadequate coverage. Let’s say a consumer purchases the lowest priced plan, they may have just exposed themselves to a larger financial loss in the event of a major loss or accident. Here is an example, the consumer purchases a low price auto insurance policy online not knowing that the limits only provide $15,000/$30,000/$5,000 Bodily Injury Property Damage Limits (BIPD). They then rear end another party causing severe damage to the vehicle and injuring the other driver and a passenger. The damage to the other car ends up costing $15,000 and medical bills for each person in the other vehicle reach $30,000 per person including their medical bills, pain and suffering and loss of wages for a total of $60,000 in Bodily Injury and $15,000 for property damage. The insurance carrier pays out $5,000 for the damage to the other parties vehicle and $30,000 in Bodily injury damages leaving the customer responsible for an out of pocket bill of $40,000. Once the carrier paid out $15,000 per person and $30,000 per accident bodily injury and $5,000 property damage their commitment to the consumer ends. Anything over the $15,000/$30,000/$5,000 BIPD is the consumers responsibility. Any assets they have are now exposed. This includes their home, income properties, savings accounts etc. The bulk of the premiums on an insurance policy is in first layers or protection or the minimum limits policy, increasing the limits may only have added a few dollars a month but provided tens of thousands of dollars of additional protection.
Had the consumer checked with a licensed insurance agent they would have been educated on protecting their assets and choosing the proper coverage and limits based upon their own individual exposures. Purchasing insurance is an educational process whereby the agent discusses the insured’s assets, exposures and assists the consumer in selecting appropriate limits based upon their individual needs. The consumer is not buying a radio where it doesn’t really matter where they buy it from. Insurance policies can be complex legal contracts that need to be discussed with an expert not purchased like a commodity.
While shopping or comparing prices online is helpful be sure you are able to speak to a licensed agent that can help explain what you purchased, make further recommendations and even find additional discounts you may not have been aware of. You may find that you receive better protection for the same price or less than what you found with an online carrier or comparison tool. For more information or a quote on your insurance needs contact our office.
