Online-Only Auto Insurance
Online-only auto insurance lets you purchase an auto insurance policy over the internet, and the national average rate of auto insurance is $118/mo. Online insurance companies only require a few details before online-only car insurance rates are revealed. Keep reading to learn how you find online car insurance companies and how much insurance costs.
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UPDATED: Jan 19, 2021
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- Online-only auto insurance lets you buy a policy over the internet.
- Computer logic lets a company price a car insurance policy instantly.
- Every online-only car insurance company has a different user interface, and some are easier than others.
- Online-only car insurance allows a company to reduce overhead and improve its expense ratio.
Online-only auto insurance is an instant auto insurance option for those who want insurance right now. Because of the instant access, this option is growing in popularity among consumers.
A few years ago, buying a policy required you to get on the phone or visit an insurance agent’s office in your area. Today, you can instantly buy cheap auto insurance online by entering some basic information.
Read more to learn how the car insurance industry has evolved and which companies offer online insurance.
Find online car insurance companies that are right for you by doing a quote comparison. Are you ready to buy online-only car insurance?
Are you ready to buy online-only auto insurance? Use our free comparison tool by entering your ZIP to see affordable online-only auto insurance quotes.
How can you get online-only auto insurance?
Online-only car insurance is different from traditional car insurance when it comes to the application process, but it’s the same when it comes to coverage.
We’re doing everything over the internet these days. Car insurance companies have set up a system, primarily using computer logic, that they can use to assess your risk as a driver.
Just about everyone can get online-only car insurance. Some companies will even offer your one-day or short-term auto insurance. Choosing temporary auto insurance comes with its own set of risks, such as paying more in the long run if you keep coverage for more than just a few days.
What information will you need to get an online-only auto insurance quote?
With an online-only car insurance policy, you’re going to be answering a slew of questions as you proceed from one screen to the next on the company’s website.
These are the steps in the process:
- Have information about the cars and drivers on the policy – These details will be the major factors that will determine your car insurance rates.
- Get multiple quotes online to compare – Each company will charge different rates because they look at your information differently. While one car insurance company might overlook that speeding ticket you got last year, another company will raise your rates because of it.
- Find out what discounts the companies offer – Discounts can really reduce your auto insurance rates, but not all companies offer the same discounts.
- Figure out what coverage you need – Most states have a certain amount of coverage that is mandatory for drivers, but it might be in your best interest to add additional coverages, like collision and comprehensive.
- Select the company that has the best coverage for you at the right price – You can complete the process all online and get your proof of insurance right away.
Answering all of these questions will allow the online-only company to put you through their modeling system and provide you with a rate. This allows you to instantly buy auto insurance online.
You will not have the option with an online-only car insurance company of going to a physical location, should you need to.
Some may not even allow you to pick up the phone and make a call to finish purchasing the policy. Live chats and other mechanisms could be used by the company to have the entire experience completed online.
You’ll also have to determine what type of coverage you need.
If you’re curious about the average cost, visit the National Association of Insurance Commissioners (NAIC). This organization offers several documents listing the average cost of insurance by state.
Do the best companies have cheap online auto insurance options?
When online auto insurance became a thing, the biggest companies made sure that they could get online-only car insurance quotes to potential customers faster. State Farm, The General, Esurance, Progressive auto insurance, and many others jumped on board.
Auto insurance companies rarely list their rates online. They want you to use their automated quote tool so they can give you a personalized quote for auto insurance.
Before you decide where to get auto insurance online, take a look at these annual insurance rates from the top companies in the United States.
|Company||Average Monthly Auto Insurance Rates||Average Six-Month Auto Insurance Rates||Average Annual Auto Insurance Rates|
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USAA, GEICO, and State Farm are the cheapest auto insurance companies in the industry. Progressive auto insurance is more expensive but maintains a spot among the best insurance companies.
Esurance and The General Insurance are popular companies, but their market share isn’t as significant as the companies above. However, The General does boast that you can get a car insurance quote in two minutes or less.
How quickly can you get online-only auto insurance?
In most cases, once you decide on the car insurance company you want, the process doesn’t take very long. Generally, once you sign and pay for your auto insurance policy, you will get your proof of insurance immediately.
How is policy servicing with online-only auto insurance companies?
You have your car insurance policy for six months or so, and then halfway through the 12-month auto insurance effective cycle, you go out and buy a new car.
With online insurance companies, the process of switching out your old car for your new one on your policy is a breeze.
Again, everything is going to be handled online from a policy servicing perspective. The company is going to have a smartphone application or a website that you can log onto where you can do everything needed with the policy.
Policy servicing in the online space is very streamlined in most instances. In the example above of changing out a car, it’s a matter of putting in the new information and having an endorsement processed to alter your policy.
The rate change is going to be immediately calculated and displayed to you as well.
You can also do simpler things such as changing your billing information, setting up automatic payments for the rate you’re charged monthly, etc. All of this policy servicing done in the online arena makes things that much faster and simpler.
Why are some auto insurance companies only online?
Many insurance companies are starting to take the online approach so they can reduce overhead.
When car insurance companies are trying to figure out how profitable they are, they’ll focus on their combined ratio. According to the International Risk Management Institute (IRMI), the combined ratio includes the loss and expense ratios.
If a company has a combined ratio of over 100, that means it’s going to be losing money on every dollar of rates it takes in. A combined ratio of 101, for example, means that a company loses one dollar on every dollar received.
The loss ratio is based on you getting into car accidents and such. While that is a bit out of the company’s control, they can use modeling to predict this type of activity. The expense ratio is where the insurance company has a lot more control.
The expense ratio revolves around paying for underwriters, claims handlers, policy servicing employees, etc. The more an insurance company can cut down on its expense ratio, the more profitable it will be.
The reduced expense ratio when it comes to online-only car insurance policies relates to the fact that you’re interacting with a website or a smartphone app. There’s no person picking up the phone and no physical location for customers to visit.
This means that the insurance company will centralize folks to handle claims and such over the phone when needed, but it’s not wasting overhead taking calls that the website or app can handle.
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When should you get online-only auto insurance?
You’ll need to decide if you like the idea of an online-only car insurance policy.
Compare the rates of these companies to the more traditional ones where you visit a location to buy a policy; chances are the rates will be lower in the online arena.
Are you okay with that type of experience, though, or do you enjoy the physical interaction with someone?
The online-only car insurance policy is something that you’ll have to experience for yourself. The user interfaces for many providers are available for you to experiment with to price policies.
Investigate and see how user-friendly they are. Are you able to customize the policy to your liking?
Are there positive reviews online for the company’s claims service?
Doing this research will help you determine whether or not online-only car insurance is right for you.
As a consumer, you want to do your homework when shopping for a car insurance policy. Use the power of the internet to compare the following:
- The prices for coverage
- The coverage options
- Discounts available
- Customer service
Online-only car insurance is a new form of insurance that has you doing everything online, cutting down on the insurer’s overhead so they can offer lower rates.
This type of car insurance may come in handy for a variety of reasons, including purchasing a new car. Buying auto insurance before you buy your car will help your purchase go smoothly since most dealers require you to have auto insurance in place before you leave.
How can you save money on auto insurance?
Car insurance is pricey so it makes sense to do everything you can to save money. Here’s a list of some of the things you can do to lower your auto insurance rates:
- Ask for discounts – Speak with your insurer to make sure you are getting every discount available. Multi-policy, safe driver, and good student discounts are just some of the discounts you might be eligible for.
- Consider your deductible – Raising your deductible will lower your car insurance rates. But keep in mind, that means you will be paying more out of pocket in the event of an accident.
- Check your coverages – If you have an older car, you might not need to carry that collision or comprehensive coverage anymore. Reevaluate your needs to make sure you’re not paying for coverages you don’t need.
- Look at where you are in life – If you’ve gotten married, improved your credit score, or moved to a less risky area, you might be able to get lower car insurance rates.
- Shop around – The great deal you got two years ago might not be the best deal out there now. Compare quotes to see if you are still getting a great deal or if there are better deals available now.
Check out the rates offered by some of these insurers and decide if online-only auto insurance is the right choice for you. Find affordable online-only auto insurance rates now by entering your ZIP to compare quotes.
Frequently Asked Questions: Online-Only Auto Insurance
Let’s answer a few frequently asked questions to wrap up what you’ve learned about online-only auto insurance. These questions appear on search engines across the web.
#1 – What is the cheapest online auto insurance?
The cheapest online car insurance is USAA. However, only active and retired members of the U.S. Armed Forces are eligible. If you’re in the immediate family of someone in the military, you can get a USAA policy.
#2 – Can you sign up for auto insurance online?
Yes. Online auto insurance is available to anyone, 24/7.
#3 – What is the best online auto insurance company?
Although it’s not the top company overall, the best online auto insurance is Progressive.
#4 – Who has the cheapest auto insurance?
USAA, GEICO, and State Farm have the cheapest auto insurance overall.
#5 – How can I get super cheap auto insurance?
You can get super cheap auto insurance by enrolling in liability-only coverage. You can keep your rates low by only buying the minimum car insurance required in your state.