Auto Insurance: The Pros and Cons of Using Comparison Sites

“Find the cheapest car insurance rates in your area now!” reads the brightly flashing advertisement on your screen.

After clicking on it, you’re told that you only have to enter your information once, and the website will instantly compare hundreds of the top insurance carriers to help you find the lowest rate.

“Well, this sure beats calling around and wasting my time obtaining multiple quotes,” you think to yourself.

But before handing over your personal information, are there any considerations to factor into the equation? Can you realistically expect to save time and money this way, versus obtaining insurance quotes using more traditional methods?

We’re glad you asked! Because that’s exactly what we’ll help you learn here—starting with the basics.

How Do Car Insurance Comparison Websites Work?

By default, an insurance comparison website helps consumers compare insurance quotes from different companies.

While you’ll find comparison sites for just about every facet of the industry, including home, life, health, and even pet insurance, Kevin Curry, founder and CEO of Comparity, tells us:

“Insurance comparison is typically most effective for auto insurance, where there are fewer variables and more public data about rates for a variety of demographics. This allows comparison sites to instantly return reasonably accurate quotes given a small amount of information.”

As a result, most of what we’ll discuss in this article relates to auto comparison services.

Although you might not pay anything as a consumer, the point of any insurance comparison site—auto or otherwise—is to make money. After all, these are businesses, so the end goal is to turn a profit.

But the exact business model used by these insurance comparison sites could have a big impact on your overall quoting success. Why?

We won’t go into unnecessary detail here, but let’s answer this question by quickly discussing their major differences.

Lead Generation Websites

By far the most common type of car insurance comparison site is one where you enter your personal and driver details, including vehicles, coverage amounts, and accidents or violations.

Then, the website bundles your information and sells it (called a lead) to whoever's in the market; usually, independent agents looking for new clients.

This certainly might increase the number of companies you’ll be able to quote, but you could also be gambling with your information. This is because some lead generation sites are strict about the number of agents who can purchase your data (usually 2-3 in your area), while others might sell it to dozens.

What’s more, some lead generation comparison sites don’t restrict who can buy your information or what they’re allowed to do with it, so you could find yourself inundated with sales calls and spam emails for weeks or months afterward—much of which might not have anything to do with insurance.

Pro tip: How can you tell the difference? Before entering any of your information on a comparison website, it’s always a good idea to glance at the privacy policy, which will outline exactly what happens with your information after handing it over.

You can often locate the privacy policy link in the footer (bottom) of a website. Don't see it? You might want to pass.

Quote Aggregator Websites

The other most common kind of car insurance comparison engine is one sponsored (read: paid for) by insurance companies.

While there are variations, this typically occurs when an independent third party creates a website and solicits insurance companies to advertise their services to consumers looking for quotes. To do this, they often charge the carrier a flat fee, or a commission based on the number of leads provided.

These sites are often known as quote aggregators. And while they often represent less of a gamble than strictly lead generation websites, Dave Delaney, President of Owner Operator Direct, warns that they could represent limited options:

“It's important to note that these quote aggregator companies only provide quotes for the companies they work with. Some insurance companies are open to doing business with them, and others are not, for various reasons (the amount of commission they command, the amount of business they will provide doesn't meet a certain threshold where it's worth the expense, etc.).”

Jamie Johnson, investment manager at FJP Investments, adds, “If the only quotes being shown are those willing to pay and be listed on the comparison site, this means you could ultimately be missing out on the best deal, since all available insurers are not competing on the platform.” 

Independent Agencies & Brokers

Like an insurance comparison website, agents and brokers act as an intermediary between you and an insurance company. Their goal is to help you meet your coverage needs at a competitive price.

The difference is in whom they’re ultimately working for. On the one hand, an independent agent works on behalf of the insurance companies they represent (there can be dozens, or even hundreds, depending on the agency's size).

On the other hand, a broker represents you, the consumer. They're not appointed by any specific carrier, so they'll take your application and present it to whoever might best meet your needs, based on their experience.

What’s the point? It’s not uncommon for a large agency (or even a brokerage) to set up a website that provides insurance quote comparisons; The Zebra is a prime example of this.

Going this route might result in you losing the benefits of hiring a nearby agent (local knowledge, community involvement, etc.), although it can also help you avoid some of the less savory aspects of traditional comparison sites, such as ensuring your information is safe and avoiding unwanted solicitation.

According to InvestorGuide, another consideration to keep in mind is that prices through these online agencies don’t always turn out to be lower than what you can get locally.  After receiving a bare-bones "teaser" rate:

“You may not qualify for the policy – your health isn't way above average, for example, or you fall above age restrictions – or the agent does a needs analysis that shows you need coverage beyond the basics, and suddenly you are looking at a higher-priced policy that is no better than what you could have gotten from your local seller.”

With all of this information in mind, let’s take a look at some of the most popular insurance comparison websites and see which classifications they fall under.

What Are Some Popular Car Insurance Comparison Sites?

Over the years, the HighYa team has written about some of the more prominent auto insurance comparison websites out there, including Best Quotes, Compare.com, EverQuote, Get My Insurance, Good2Go Auto Insurance, Provide-Savings, and US-Quote.com.

How do they stack up? Here’s your quick-glance guide: 

Company Type Target Market & Specialties Personal Info Details # of Carriers Worked With
Best Quotes Lead Generator Auto, home, health, life, disability and pet insurance. Only up to 8 leads sold. May be sold to unrelated third parties. N/A
Compare.com Agency Auto. Also offers health, motorcycle, home, and small business through third parties. Only shared w/agents when ready to buy.  50
EverQuote Lead Generator Auto Up to 3 agents (only 1 agent for exclusive leads). N/A
Get My Insurance Lead Generator Auto No listed limit. May be shared with third parties.  N/A
Good2Go Lead Generator Auto No limit listed, although no unrelated third parties involved. N/A
Provide-Savings Lead Generator Auto No limit listed, but not sold or redistributed to third parties. N/A
The Zebra Agency  Auto Only shared w/agents when ready to buy. 200+
US-Quote.com Lead Generator Auto No limit listed, but will not be sold or otherwise transferred to unaffiliated third parties. N/A

As you can see from the raw data, there aren’t a whole lot of differences between many lead generation insurance comparison websites, other than what they do with your information.

Even among agencies, the biggest difference seems to be the number of carriers they represent.

Whether we’re talking about lead generators or agencies, though, you’ll find that most online customers report less-than-stellar feedback for insurance comparison websites.

For example, here on HighYa, these sites had average ratings of two stars (or less) at the time of research. While some certainly claimed to have had a positive experience, common complaints referenced:

  • Excessive sales calls and emails
  • Higher than expected rates
  • Inaccurate quotes
  • Underhanded advertising methods (specifically, fake articles)
  • Inability to contact the website directly

Another common complaint is that these sites were a “waste of time.”

In our experience, this is because these companies aren’t always upfront about what happens after entering your information. And after spending 10+ minutes filling out what they thought was an application, they end up being redirected to a carrier’s website, only to start the process all over again.

To help you avoid situations like this, as well as from handing your information over to whoever’s willing to pay top dollar, what are some real-world methods you can implement? 

Will Auto Insurance Comparison Sites Save You Time & Money?

When it comes down to it, insurance comparison websites promise to help consumers save time, money, or both.

Based on these claims, figuring out which car insurance comparison site you should use—or if you should use one at all—largely boils down to a single question:

Will this service save me time and money, as promised?

Let’s break it down.

1. Understand What You’re Getting for Your Time

Now, this certainly isn’t a universal rule of thumb.

But based on our experience investigating these companies, along with the consumer feedback we discussed above, it’s important to understand that lead generation websites don’t necessarily exist to help you score the best rate, match your coverage requirements, or put you in contact with local agents aligned with your specific needs.

Instead, despite marketing angles usually claiming otherwise, their ultimate, no-spin goal is to capture your information and sell it for a profit. That’s it. 

Even so, can you still expect them to help save you time? Perhaps.

But, compared to picking up the phone and calling a local agent who represents the widest selection of carriers, can you expect to save a great deal of time filling out one of these two-minute applications? We’ll let you be the judge.

However, as mentioned earlier, Kevin Curry notes “that it's important for shoppers to know that after using the comparison site, they haven't actually completed an insurance application. [As a result,] shoppers may have to re-key all of their information into an application when they are ready to buy.”

But many professionals we spoke with, including Greg Sanders, President of Peachtree Life Insurance, claimed that it’s “always best to enlist the help of a few independent agents. Let them know you are shopping the market and you will get the best and most comprehensive comparisons. A consumer might get lucky and find a great independent agent immediately, but it’s best to check with at least two or three.”

After all, agents can have an in-depth conversation with you about the types of coverage you’re looking for, your budget, important factors, and even special underwriting circumstances or eligibility situations.

As Dave Delaney told us, “one can never underestimate the relationships between brokers and insurance underwriters at various carriers. A real life broker might be better able to better convey information to an underwriter, with a human touch that says, I trust this person, he/she seems like a good risk to me. I think you can give them a significant credit.”

Don’t know any agents or brokers in your area? Most professionals recommend asking people you trust for referrals. After all, if an agent or company has taken great care of someone, that person will typically be happy to refer you.

What about from a money perspective?  

2. What You See May Not Be What You Get

Before launching a writing career, I spent the better part of a decade as a personal lines underwriter for one of the largest insurance companies in the country. And based on these years of experience, I can unequivocally tell you that rates are rates.

In other words, all things being equal, Mega Bucks Insurance Company will quote you the same price, whether it comes from Agent A or Comparison Site B.

As a result, agents and comparison engines have no input in your rates, so make sure you don’t get angry with them if they’re not able to beat your current premium.

Pro tip: This is especially important to keep in mind when reading online reviews for any comparison sites you’re considering since consumers tend to lump them, agents, and insurance companies into the same boat.

In a lot of instances, though, shoppers might not realize that even a small change in risk (such as indicating incorrect vehicle use or misplacing a number in the VIN) can have a meaningful impact on their premium. And if their comparison site’s information doesn’t match what’s provided to the insurance company, they could experience significantly higher rates.

According to Kerri Moriarty of Cinch Financial, these services understand most of us are shopping based on price. Given this, you should pay close attention to “the default settings [they] use to determine their recommendations – from inputs like driving history and credit score to default coverage limits.”

Why? “Because many customers are motivated by price, they want to show the most favorable options – which won’t apply to you if you have a lower credit score or a speeding ticket,” she told us.

Kevin Curry of Comparity seconds this point, “Many comparison sites drive toward the lowest price and will even decrease coverages and increase deductibles to offer [falsely] lower prices. Both shoppers and agents should be aware.”

Where Does This Leave You Regarding Car Insurance Comparison Sites?

When it comes down to it, insurance agents and brokers exist for a reason: to help you obtain the coverage you need at competitive prices. They’re available for questions and concerns during the process, and are always around should something occur once your policy is in force.

Can they save you money? This depends on thousands of individual factors, including the specific companies they represent, your coverage needs, and your claims record to name just a few, which are something we can’t know about you.

Then again, there’s no guarantee that a comparison site can save you money, either, while you could be gambling with your personal information.

But even if agents can’t save a ton of cash compared to your current carrier, their personalized service might add more overall value to your policy. After all, insurance policies aren’t needed often—but you want to ensure you have adequate coverage in place to help you recover financially in the event of a loss.

And in the end, as we mention so often, the HighYa team is all about helping you make informed, valuable purchases. 


Derek Lakin

Senior Editor at HighYa. With more than a decade of experience as a copywriter, Derek takes a detail-oriented, step-by-step approach to helping you shop smarter. Whether it’s nutritional supplements or new scams, he believes an informed consumer is a happy customer. Connect with him on Twitter: @DALwrites


Comments

comments powered by Disqus

Want to Learn How to Build Amazing Credit Scores?

Our FREE eBook will teach you how to build amazing credit scores, save thousands and score the best deals on loans, insurance, and credit cards. Enter your email below to get a free copy of the eBook and to receive our weekly newsletter!