Shopping for insurance online is a little like shopping for it over the phone, except you're using a Web browser instead of an 800 number and you're filling out an electronic form yourself instead of having someone else do it.
It requires a lot of personal information about yourself, your family and what you want to insure. If you're shopping to replace a policy, it helps to have a copy of the filled-out form for your existing policy in front of you.
There are a number of Web sites, such as Quotesmith and Insweb, which offer quotes from several different carriers on a variety of insurance. Some of the sites function as sales and marketing platforms for independent insurance agencies.
There also are carriers such as Geico, AIG and Hartford Financial Services, which sell insurance directly to consumers through their own sites.
"If you know exactly what you need, shopping online can be ideal," said John Spagnuolo, a spokesman for the Insurance Information Institute. "If you're not sure of your insurance needs, take the time to educate yourself, so you won't have gaps in your coverage."
Spagnulolo suggests getting quotes from at least three different insurers. But he says consumers visiting web sites with multiple quotes "should not be swayed by price alone. Look for a fair price and excellent service."
In the case of Geico, it's not unusual for clients to gather information through the Internet and still complete the purchase over the telephone through an 800 number, said spokeswoman Chris Tasher.
The company was founded in 1936 and always has sold insurance directly to consumers, through direct mail and over the phone. The ability to reach potential customers through the Internet had a major impact on sales, she said.
"As people become more and more familiar with this, they see how much easier it is and they become more comfortable with doing business this way," Tasher said.
It's always a good idea to talk with friends about the experiences they've had with insurers and contact a state insurance department for background information on any carrier considered for coverage, Spagnulo said.
Read the fine print and understand that executing an insurance transaction online is as binding as if insurance forms were signed in the presence of an agent.
Two years ago, President Clinton signed into law "a digital signature bill that gives online contracts and related documents the same legal standing as their paper counterparts," Spagnulolo said.
Some industry officials say reluctance to risk making a mistake in the insurance-purchasing process is a reason far more consumers shop for insurance online than actually buy insurance online.
Matthew Josefowicz, who conducted a study on online insurance shopping for Celent Communications published early this year, estimates less than 2 percent of the shopping results in insurance purchases completed entirely online.
In most cases, consumers use information they've gathered online to buy insurance through agents they contact later, he said.
But Web sites can be powerful marketing tools for insurance, he said. Auto coverage attracts the most online shopping because states require drivers to be insured.
The study found about 30 percent of the consumers who buy auto insurance policies have done some shopping for them online, and some insurance executives interviewed for the study expect that to double within four years, Josefowicz said.
Personal life and health insurance lines attract about half as much Internet shopping as auto insurance, but that traffic also is expected to double, he said.
Many consumers who shop for insurance online appreciate the ability to conduct research whenever it is convenient for them and to gather insurance information with ease in an environment free of sales pressure, he said.
But, "once they move into the application phase, the anonymity benefits go away and the ease of use benefits are marginal," Josefowicz said.
Increased public awareness and acceptance of e-signatures in business transactions will raise the percentage of online shopping that results in purchases completed entirely through the Internet, he said.
"But, that's not going to be the magic bullet that's going to get everybody to buy online," Josefowicz said. "Within the next five years (the percentage of insurance bought online) might creep up to 5 percent, but certainly no higher than that."
Doug LeDuc writes for the Fort Wayne (Ind.) News-Sentinel. E-mail him at dleduc@news-sentinel.com.
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