Is Online Insurance Cheaper?

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The simple answer to the question “is online insurance cheaper?” is yes, but things are never that simple. In order to get a better understanding of how to get cheaper insurance, it helps to have a full understanding of what insurance actually is.  

What is insurance? 

Insurance provides protection against a possible eventuality. It’s essentially a financial risk management tool.  

There are different types of insurance – all dependent on what you need. The most common types of insurance include car, health, homeowners’ and life insurance. For many people, buying insurance may involve the use of an insurance broker, who should ideally be highly knowledgeable about the industry. Using a broker can save you not only time but also money.  

Another way of possibly achieving this is by getting online insurance.  

Is online insurance cheaper? 

Online insurance is considered to be cheaper largely because you go direct and don’t incur commission costs.  Another factor to consider is that access to internet has become easier and largely more cost-effective. In recent years it’s also become increasingly evident that South Africans who shop online feel that making purchases on the internet is more convenient. A MasterCard survey also found that fewer people are making impulse purchases online, so for the individuals who are likely to purchase insurance online it will be a well-thought-out decision. Shopping for insurance online can often be a dangerous and misleading venture if you aren’t careful and you aren’t aware of potential pitfalls. 

Using this option may be convenient when you have no need for a broker relationship. It’s however important to compare the complaints ratio of insurance companies. A high number of complaints is an indicator that the insurance company may not be providing excellent customer service. This may actually be costing clients more in the long run. Cheaper is not necessarily better. 

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