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For insurance, shop online
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March 20, 2000: 5:45 a.m. ET
Consumers can save money by trolling the Net for various insurance quotes
By Staff Writer Rob Lenihan
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NEW YORK (CNNfn) - In the Woody Allen film "Take the Money and Run," prison officials punish a would-be escaped convict by locking him up in solitary confinement -- with an insurance agent.
OK, that's a little harsh. But if you really don't want to sit across the table from an insurance salesman, you can sit across from your computer instead and get price quotes and certain types of coverage over the Internet.
Experts say you can save money and shoe leather by shopping online. Using California as an example, Todd Eyler, senior analyst at Forrester Research, said consumers can save an average of $500 on auto insurance by comparing prices on the Web.
"With the Internet you're able to get apples-to-apples comparisons and real-time price quotes," he said.
While there are relatively few companies that sell insurance directly over the Internet, Eyler said this will be a growth year for online insurance, with the majority of major carriers offering auto insurance via the Web in 2001.
But convenience aside, you still have to be careful when you buy insurance online.
"This is not like buying books from Amazon.com (AMZN: Research, Estimates)," said Joe Annotti, assistant vice president of public affairs at the National Association of Independent Insurers. "It's a much more complicated process."
Rules and Regulations
New technology notwithstanding, the insurance business is highly regulated, and analysts say this is one of the reasons the industry has lagged behind others in the financial sector in its move to the Web. Insurance is a state-regulated business so the rules vary. Annotti said many states still require a "wet signature" on an insurance policy.
Lee Covington is director of the Ohio Insurance Dept. and chairs the National Association of Insurance Commissioners' Electronic Commerce and Regulation Working Group. He's familiar with state requirements, and says they need not inspire consumer dread.
 "State regulators and the NAIC really want to be progressive," Covington said, "We are working hard to break down the regulatory barriers."
Covington says the NAIC has come out in favor of the Uniform Electronic Transactions Act, which would give legal validity to electronic transfers.
Don't go to the Web looking for Internet insurance bargains -- at least not yet. Insurance carriers have to file rates with each state in advance, so they can't go changing prices in a heartbeat. But sites exist that provide quotes from a number of carriers, allowing you to decide which is best for you. Some of these sites also close sales on behalf of the insurance carrier via the telephone.
While many such sites will be coming online, Eyler said Quicken.com, a CNNfn partner, and Insweb.com (INSW: Research, Estimates) are the best sites to go for "accurate and actionable quotes."
Insweb.com works with 49 insurance carriers, including American International Group (AIG: Research, Estimates), John Hancock Financial Services (JHF: Research, Estimates) and Metropolitan Life.
Another site, Quotesmith.com, said it provides quotes from over 300 companies, is fully licensed in all 50 states and says the words all consumers want to hear: "No salesman will call."
Put it there.com
When buying insurance in the cyber world, Covington said a lot of old world rules still apply. Learn about a particular company and determine what your needs are.
"You need to understand what product you're buying," he said. "We encourage people to use the Internet as a tool, but consumers do need to understand what they're buying and compare the products."
A few things to keep in mind:
- Check out a few sites. Eyler said different sites have different carrier relationships; you want the whole story for your coverage.
- Have all your information ready -- make and model of your car, existing auto insurance policy, anything that you figure an insurance company might ask.
- The site should have a needs analyzer instead of letting you just buy blind.
- Doubts about a particular carrier? Jayna Neagle, director of new media for the Insurance Information Institute, suggested going to the A.M. Best Co. Web site to get the financial skinny on the carrier. If a company's got an A++ rating, it's top of the line.
- If you want more information about a carrier, you can go to your state insurance department and verify if the carrier is indeed licensed to operate in your state.
Don't fall in love with a low price simply because it's low. If you get a bargain at the expense of your coverage, that's no bargain at all.
"People like to sue these days," Eyler said. "You need to have a good amount of liability protection." 
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