Shuman Roy is an entrepreneur, business owner, and musician. He started RoysNoys, LLC in 2013 as a music production and education service company. He also offers small business consulting and advisory services to help businesses get from start-up mode to turn-key operations. Shuman earned his M.B.A from the Stern School of Business in 2001 and has an undergraduate degree from Manhattan College in ...

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Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Joel...

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Reviewed by Joel Ohman
Founder, CFP®

UPDATED: Jul 19, 2021

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American consumers submitted 38.8 million online insurance quote requests and purchased a record 2.8 million auto insurance policies online last year, according to a recent study conducted by comScore.

Both requests and purchases were up more than 20 percent versus the previous year as consumers looked for new ways to save on auto insurance during the ongoing recession.

Many industry insiders also believe insurance, like many other services, is becoming commoditized.

In other words, the average consumer no longer perceives any difference between insurance companies or products, and makes their buying decision based on ease of purchase and price.

Is that an accurate representation of what auto insurance has become?

It depends on who you ask. Companies who already do business solely online will tell you insurance is just a pricing game…the lower the insurance premium, the better the policy.

Companies who sell exclusively face to face with captive agents will tell you a different story…as they scramble to get online.

State Farm has gone so far as to create a website called, aimed at convincing you to go with an agent while also offering an online quote, which likely gets routed to a local agent in your area based on the address you provide.

Unfortunately, State Farm only has one policy to offer their insured, which leaves them vulnerable to the client who surfs the web to “shop their rate.” They clearly recognize the value of using the internet to snag more customers, but cannot do much in the way of offering pricing options…other than reduce coverage.

Can’t you get the best of both worlds?

Sure. In order to get the ease of use and the rate comparisons, you can continue to shop online, but if you prefer an actual human being, you can search for a local independent agent who offers online quotes.

An independent agent will be able to shop your rate with several insurers at one time to ensure you get the best deal. That’s a far cry from the limits of a captive agent and the impersonal touch of direct insurers.

What should you look out for?

Shopping and/or purchasing insurance online can be an easy way to obtain insurance and be relatively certain you have a fair rate. It’s certainly a better choice than purchasing from a captive agent (Farmers, Allstate, State Farm), who can all only offer you one policy at one price.

However, be sure to at least speak with an insurance agent about how much insurance you need before you make a purchase. At the end of the day, you need to make sure you’re properly covered, and the best way to do so is to work with an agent.

Is the trend likely to continue?

comScore noted that 35 percent of respondents who had not purchased insurance online would be likely to do so in the future, and that trend only looks to be rising.

But be sure to supplement your online shopping with the knowledge of a local independent agent if you’re not sure what liability limits you should have, or if you need things like physical damage coverage, PIP, gap coverage or med pay.

Make that call even faster if you don’t know what those coverage types are!