Part of my morning ritual is catching up on business and marketing headlines. I particularly love the News App on my iPhone, it’s a great way to get a feed of the latest headlines’s from popular blogs and authoritative news outlets.
As you might imagine, if there is a news story about online auto insurance quotes or insurance agents generally it catches my eye.
Well, just such a thing happened the other day. I was pursuing the headlines and came across a story being pushed by various outlets, Avoid Pushy agents By Comparing Car Insurance Quotes Online!
These types of articles are of particular interest to me given my history running profit & loss for such companies as GEICO and Esurance, and now, more importantly, as the owner of an independent insurance agency. What compelling argument might be made to convince consumers to pivot toward online auto insurance quotes over insurance agents? Who is marketing the piece? Why?
Before we jump into the who and the why, let’s first understand the argument.
Pushy Insurance Agents and Online Auto Insurance Quotes
The crux of the argument was simple. The author asserts that while insurance carriers have armies of actuaries, underwriters, research marketers, and data, it is really the insurance agent who understands the game. Insurance agents know the rules, systems, products and underwriting guidelines, and the unscrupulous insurance agent will use this knowledge to service their own agenda.
These are the pushy insurance agents, and they are the reason that so many are electing to get online auto insurance quotes.
Without providing any data or research to back up their claim, the author offers us that the most “pushy” insurance agents are captive insurance agents, these are the insurance agents who work with companies like State Farm, Allstate or Farmers. He claims that these agents will:
- Pretend to know what is best for you, or that they know exactly what you need.
- They will offer you the most basic of policies, without optional coverages.
- They will withhold information about discounts and emergency services.
Without skipping a beat, the author then makes claims about “aggressive” tactics which he calls “emotional blackmail,” and alludes to the fact that insurance agents will lie or misinform. These types of behaviors are the sales habits of the dishonorable insurance agent. It is the sum-total of these behaviors which will cause the consumer to pay more for less coverage.
Could This be True?
We’ll if this were true, it makes sense that more consumers would turn to online auto insurance quotes. But this isn’t true. Furthermore, while it’s not our normal practice as independent insurance agents to come to the rescue of our captive insurance agent competitors, we are compelled to set the record straight; the portrayal of captive insurance agents is just patently inaccurate.
If there is any criticism of insurance agents and their understanding of the underwriting rules, systems, and products, it comes from the insurance companies they represent … not the consumer. It’s not that they use their knowledge to sell less coverage for more money. Rather, its that they use their knowledge to find ways to get the consumer the most coverage for the least money.
Captive insurance agents, and the independent insurance agents that sell preferred brands like Travelers, The Hartford, Nationwide and Mercury, sell the value of the coverage they offer. They are trained to offer all the emergency services and optional coverage without applying high-pressure sales tactics.
No insurance agent will avoid offering every discount at their disposal. It’s laughable to think of an insurance agent not applying all available discounts. Insurance agents know that price is a large component to the selection of an auto insurance proposal. They are also well aware of the need to match or improve the benefit the consumer is presently receiving. These two elements lead to insurance agents providing the most coverage available, at the best overall rate they can achieve … basic Freakonomics.
What Do Online Auto Insurance Quotes Have to Do With it?
If the argument is that the consumer needs a trusted adviser to provide consultation about the value of optional coverages and emergency services, then online auto insurance quotes don’t provide any solution to the problem … no matter how fictitious the problem being argued is.
The process-flow of an online auto insurance quote is not designed to efficiently provide coverage and policy advice, it’s primarily designed to render a rate quote. The consumer who receives comparison online auto insurance quotes, is at a loss to understand the nature of the exclusions a specific company or policy might have, the limits of the coverage they may have selected, or why they may want to consider optional coverages.
Moreover, many consumers don’t fully understand why certain questions are being asked. In many online auto insurance quotes, the consumer will not respond to the question, “Current Insurance Company,” thinking this is being collected for marketing purposes. But in many states, this question, along with the current limits of the auto insurance policy, are used in rating. Therefore, the customers who elect to NOT answer, and have current, in-force auto insurance, aren’t getting the best available rate quote.
Online auto insurance quotes aren’t a solution to undersold coverages, and misapplication of both non-discretionary and/or discretionary discounts.
Well Then, Who Wrote the Article?
The article in questions is actually a press release from a website called CarInsuranceHints.com, and it’s been picked up by many blogs and other venues. It received enough credibility to be included in my NewsApp feed from Apple News.
I don’t know for sure what CarInsuranceHints.com is, but they appear to be a site that drives traffic for the purposes of selling clicks to various online auto insurance quotes providers.
This leads me to my primary criticism, the rules of the internet, those that govern how websites rank and how traffic is generated, is weak in it’s ability to discern between junk and valuable content. This press release is a poorly researched and written piece, it was created for the sole purpose of generating traffic and adding SEO juice. The consumer who actually reads this press release will be ill-informed, or worse, be driven to a site that cannot provide the value it purports to offer.
Small business owners need to recognize that consumers have shifted to the internet to conduct initial research for nearly all product categories, small business owners need to get more sophisticated with our approach to online marketing. The internet is filled with sophisticated online marketers for auto insurance keywords, good sites and bad sites a like. If insurance agency owners are to continue to be relevant in the auto insurance space, we MUST adapt or slowly become less relevant.
As a former P&L managers for two of the most recognizable direct-to-consumer brands, I appreciate the value of online auto insurance quotes, and I understand their value. We actually can quote and bind auto insurance online on this very site. But online auto insurance quotes and insurance agents are not mutually exclusive things. Used in conjuction with one another they provide the greatest overall value.
While not all insurance agents are the same, and for the many things that insurance agents are, the overwhelming majority certainly aren’t “under-sellers,” and “over-chargers”. Just not in the insurance agent handbook.
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