Online Only Auto Insurance

Online-only car insurance lets you buy a policy over the internet. The national average rate of auto insurance is about $118/mo. You can compare rates below.

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Mathew B. Sims is Editor-in-Chief and has authored, edited, and contributed to several books. He has been working in the insurance industry ensuring content is accurate for consumers who are searching for the best policies and rates...

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years (BBB A+). He is licensed as an agent to write property and casualty insurance...

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Reviewed byDaniel Walker
Licensed Insurance Agent

UPDATED: Apr 22, 2020

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Things to remember...

  • Online-only car insurance lets you buy and a policy over the Internet
  • Computer logic lets a carrier price a car insurance policy instantly
  • Every carrier has a different user interface, and some easier than others
  • Online-only car insurance allows a carrier to reduce overhead and improve their expense ratio

It was not that long ago that when you needed car insurance, it required you to get on the phone, or get in your vehicle and take a ride.

Insurance carriers used to require you to visit their offices to get an insurance quote or give them a call on the phone, providing all of your information as they process your request.

The car insurance industry has evolved quite a bit since then, to the point where there is now such a thing as online-only car insurance.

The online-only car insurance market is unique in that the only method that you can buy your policy is through the Internet.

Calling on the phone or going to try to visit a physical location is not an option.

There are a lot of unique benefits that you can get out of purchasing an online-only car insurance policy. As a consumer, understanding what this means though out of the gate can help you decipher if this is the proper approach for you.

Car insurance carriers that operate online only are not for everyone and the more you aware of what it means to be one of these types of insurers, the easier of a decision it will be to choose to go that route or another.

Find the car insurance company that’s right for you by doing a quote comparison. Use our free rate quote tool to see top insurers side-by-side.

Applying for Online-Only Car Insurance


Online-only car insurance is unique than traditional car insurance when it comes to the application process.

You are doing everything over the Internet, and the carrier has purposefully set up a system where they are going to be able to, through computer logic primarily, assess you as a risk.

With an online-only car insurance policy, you are going to be working to answer a slew of questions as you proceed from one screen to the next on the website of the carrier.

They are going to be asking you about the following:

  • the car that you drive
  • your driving habits
  • your driving history

Answering all of these questions is going to allow the online only carrier to then put you through their modeling and such to get a premium output in the end.

You are not going to have the option with an online-only car insurance carrier 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 of the policy. Live chats, and other mechanisms could be used by the carrier to have the entire experience completed online.

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Policy Servicing


You have your car insurance policy for six months or so, and then halfway through the 12-month effective cycle, you go out and buy a new car.

With an online-only car insurance policy, 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 carrier is going to have a smartphone application that you are going to be able to log onto or a website 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 is a matter of putting in the new information and having an endorsement processed to alter your policy.

The premium change is going to be immediately calculated and displayed to you as well.

It could even be simpler things such as changing up the billing terms, setting up automatic payments for the premium that you are charged monthly, etc. All of this policy servicing done in the online arena makes things that much faster, and simpler.

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Lower Overhead for a Carrier

Many insurance carriers are starting to take the online approach for one reason when it comes to car insurance, and that is reduced overhead.

When a car insurance carrier is trying to figure out how profitable they are, they will focus in on their combined ratio. This ratio is going to include:

  • their loss ratio
  • their expense ratio

If they have a combined ratio over 100, that means that they are going to be losing money on every dollar of premium they take in. A combined ratio of 101, for example, means that a carrier loses one dollar on every premium dollar received.

The loss ratio is based on you getting into car accidents and such. While that is a bit out of the control of carriers, they can use modeling and such to predict this type of activity. The expense ratio is where the insurance carrier has a lot more control.

Expense ratio revolves around paying for underwriters, claims handlers, policy servicing employees, etc. The more that an insurance carrier can cut down on their expense ratio, the more profitable they are going to be.

The reduced expense ratio when you are talking about online-only car insurance policies comes in from the fact that you are interacting with a website, a smartphone app. There is no person that you are picking up the phone and calling or building that you are visiting.

This means that the insurance carrier is going to be able to centralize folks to handle claims and such over the phone when needed, but not waste overhead handling calls that their Internet presence can take care of for them.

Gaining Comfort over the Experience


You will need to decide if you like the idea of an online-only car insurance policy.

Compare the premiums of these carriers to the more traditional ones where you are visiting a location to buy a policy; chances are the premiums 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?

Figuring out if an online-only car insurance policy is something that you are going to have to experience for yourself. The user interfaces for so many carriers out there exist for you to mess around with, to try to price out policies.

See how user-friendly they are and the type of feedback that you get from utilizing them. Are you able to customize the policy to your liking?

Are the reviews available online for the carrier confident in the event you have a claim and need assistance?

Doing this research will help you get to the answer of 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. You want to use the power of the Internet to compare the following:

Online-only car insurance is a new form of insurance that has you doing everything online, cutting down on the overhead that an insurer will have and thus allowing them to offer lower premium amounts.

Check out the premium offerings from some of these insurers and make the decision if this is a good path for you to follow for your car insurance needs. Enter your zip code below to check out insurance quotes today.

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Compare quotes from the top auto insurance companies and save!

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