Shopping for car insurance online vs. shopping offline

Getting car insurance used to be an arduous process.

You had to physically venture down to your local insurance broker’s office, something easier said than done when you didn’t physically have a car. You’d fill out an application, which would then be faxed (or even mailed) to the insurer. After a day or two, you’d officially be approved.

These days, shopping for car insurance is as easy as firing up your computer. Online car insurance tools allow you to get quotes from many of Canada’s top auto insurers in less than five minutes. It’s fast, easy, and best of all, shopping for car insurance online usually results in significant cost savings -- especially if you’re switching from your existing carrier.

With advantages like that, it’s little wonder why many Canadians -- especially those under 35 -- have purchased car insurance online. But there’s an argument to be made for getting insurance offline too.

The case for shopping for car insurance offline

Each year, I shop my car insurance. It doesn’t take much time, and it’s proven to be a powerful way for me to save money.

The first two years I used this strategy, I used an online tool to search for the best deals out there. It didn’t take much time, and when I found a quote I liked, switching insurers was a breeze.  

This year, I gave a local insurance agent in town the opportunity to match the lowest quote I got from searching online. She was able to match it, so I gave her the opportunity to get a commission from me.

There was one big reason behind this: I know this agent. She’s relatively new at the business, and I can tell she’s working very hard to try and make a name for herself. She’s grateful for my business, and she told me so.

Strengthening ties with a local business person is a good thing, especially for somebody like me who comes from a small town. Who knows when that contact will come in handy? And I didn’t even have to pay more.

The case for shopping for car insurance online

One downfall to getting my insurance from an agent in an office was the small talk. It took close to half an hour for her to verify all our information after we got sidetracked a few times. Younger people are proving time and time again that, all things being equal, they prefer to take the route where they don’t have to talk to people.

There are certain problems with the agent system itself, too. I first got car insurance back in 2006. The rate crept down each year, but not by much. Each year I’d go to my broker’s office and ask them to shop my policy, and each year I’d get the same response. I was getting the best deal.

After a few years of this, I decided to shop around on my own. An hour later I had a quote that saved me hundreds of dollars a year -- and this was before the days of shopping for auto insurance online.

Many brokers only offer products from a few different insurance providers. Others are either too busy or unwilling to shop your policy every year. They’d rather get the renewal commission than go to all the work of shopping a policy. And remember: brokers have to keep their insurance partners happy. The last thing the insurer wants is customers that jump around each year.

The bottom line? Buying car insurance online is easy, making it a terrific tool for those of us who force insurers to compete for our business. But there’s also a case to be made for buying insurance offline too.