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4 pros and cons of buying car insurance online

It has become simpler and more convenient to buy a car insurance policy online. Photo: iStock

With consumers finding it easy to shop online for insurance policies these days, the industry has also adopted a customer-centric, digitalization-powered paradigm shift to improve business. It has become simpler and more convenient to buy a car insurance policy online as well. However, some customers might have a different set of requirements and many a times their queries remain answered online.

Therefore, before deciding on buying a policy online, you must weigh the pros and cons associated with it.

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Pros of buying vehicle insurance online

No documentation: No one relishes the prospect of filling lengthy forms and furnishing innumerable documents to purchase insurance offline. “Switching to buying auto insurance products online eliminate the need to navigate this mire by only asking potential buyers to provide basic information to receive a quote,” said Animesh Das, Director – Motor Underwriting, ACKO Insurance.

Saving time: Customers purchasing insurance online also find themselves liberated from time constraints. The entire buying process can be completed within a few minutes, and the purchase can be made at any time. The offline process, on the other hand, is time-consuming, for the customer has to visit the insurance company’s branch office or meet with an agent to buy a policy.

Easy to compare: Comparing policies online and choosing the most appropriate one is a piece of cake for consumers, with web aggregators sites simplifying the entire process. Policies can also be easily examined individually, with car insurance calculators available on the insurers’ websites. By contrast, doing this traditionally involves going to different branch offices and manually comparing different policies, an unnecessarily lengthy and inconvenient process.

Low prices: “The operational costs associated with online insurance are lower than for offline insurance, since digital insurers do not have physical sales offices to maintain, and the manpower requirements are also reduced. Less operational costs equate to policies that are priced low, with no effect whatsoever on the coverage,” Das said.

Cons of buying vehicle insurance online

Queries remaining unanswered: “While buying insurance online, there could be several queries that need immediate attention. Furnishing wrong details may result in a repudiation of claim,” said Vishwajeet Parashar, Chief Marketing Officer, Bajaj Capital. For instance, if you do not have sufficient knowledge about how policy works, the procedure to get the claim settled, add-ons available with the policy, whether you should buy them or not, then there would be a lot of queries that would remain unanswered at the time of buying a policy online.

Missing out on premium discounts: Voluntary excess in an insurance policy always remain a grey area for most policyholders as to why should one opt for it. Normally, insurers allow policy buyers to share a portion of the risk associated with the insurance. This is known as the “excess”, this is a pre-determined claim amount that is borne by the insured at the time of claim settlement. So, this way voluntary excess can be bought over and above the compulsory excess to get a discount on your premium. However, to understand this, you must take help from an insurance expert before buying a policy. Mostly, when you buy a policy online, you can miss out on this important aspect which helps in lowering your car’s insurance premium. “The other disadvantage is there are some features such as ‘voluntary excess’ that buyer may not understand and skip it. On opting for such features, the premium could have been lowered,” said Parashar.

Purchasing a policy from a fraudulent website: Even though the regulator keeps policy buyers aware of many fraudulent websites that are selling insurance policy online and are not authorised, it is also your responsibility to be vigilant when buying insurance online. Thus, you need to be careful of such online scams as these fake websites can take your financial and personal information unknowingly.

Lack of help in filing a claim: Mostly, insurers don’t have a claim processing mechanism online. So, when you buy a policy online at the time of loss, you may find it difficult to file a claim because you won’t immediately get people to help you out. You first need to get in touch with the customer care representatives and so on. However, on the other hand, if you would have purchased the policy offline through an insurance agent then they would help you in settling the claim immediately. It is always comforting to have a familiar voice that can also help you in settling your claims at the time of need.

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