On the car insurance blog we have written several blog posts on finding the best insurance quotes. The advice provided includes the necessity to shop around and compare car insurance quotes. Most car insurance blogs and financial websites written and visited by financial advisors and those interested in financial planning will provide this advice…nothing new!
We however need to avoid being too technical and discuss the basics so all can understand what we are talking about! How do we actually go about comparing insurance quotes? This scenario reminds me of someone seeking advice on how to lose weight…it simply does not help to advise a person to eat the correct foods. Without telling the person which foods he must eat and which he has to avoid, the advice is of no value!
In this and following sections we would like to discuss how to go about comparing car insurance quotes and dwell a bit deeper on this topic! In this broad overview we would like to reflect on a few questions to consider before starting the process of car insurance comparison:
Why do we compare car insurance quotes?
A good starting point would be to reflect on why you would like to compare car insurance quotes. Most vehicle owners would like to do so to gain cheaper car insurance. Price is however only one component of car insurance, and comparing car insurance should rather be seen as a mechanism to find the correct product to meet the specific needs of a client!
Who compares the car insurance quotes?
Are you going to do so yourself or are you using a broker or financial advisor to do so for you? Brokers and financial advisors earn commissions on financial services rendered. If you are advised by a broker to purchase a specific car insurance policy, that broker would have been obliged to provide you with the best financial product from options having compared several products.
Through technology and the availability of direct insurers and insurance aggregators it is now possible for most vehicle owners to compare the different offerings themselves and avoid the middleman and financial costs payable to advisors.
Are you willing to put in some effort?
Even though quote comparison websites and insurance aggregators are marketed with an emphasis on their ease of use and simplicity, no decent insurance comparison is possible without setting aside some time, doing homework and putting in some effort. The process of comparison is much more than adding and comparing numbers and effort is required to make informed decisions.
Do you see this as more than a once –off comparison?
Comparing car insurance quotes should not be seen as a once –off event. The financial services industry is an evolving industry and the product that meets your needs now might not be the one to do so a few months or a year from now. Newer generation products may provide you with cost savings, extras and even some money in your pocket!
Do you know what you are comparing?
Financial writers often refer to the need of comparing apples with apples. You can only compare insurance products from different providers if they offer the same benefits. If the benefits differ or there are “extras”, you will need to strip those extras from the policies and compare the benefits which are similar. Insurance aggregators tend to simplify this process as a specific quote form will allow the client to specify a few simple needs/ requirements and the participating insurers will offer a quote based only on those identified benefits.
Are you willing to ask questions?
You can only compare insurance quotes if you are willing to ask questions. You will need to communicate with car insurance companies and ask for more than numbers. You will need to talk to either the consultants at direct insurers, or to financial advisors and even friends and colleagues who have been through the pitfalls and bad car insurance experiences!
We will, on the car insurance blog, strive to provide practical “do it yourself advice” and discuss how the vehicle owner should go about comparing car insurance quotes! We will do this by focusing on the above aspects in a series of blog posts!