July 15, 2005

Online shopping and buying auto insurance online can work well, but it's no magic path to savings, says Robert Hunter of the Consumer Federation of America. Just like when you use the phone and shop with agents, be sure to get comparative quotes.

Some sites like Quicken.com will give you competing quotes from multiple companies once you fill in your personal and vehicle information. But Hunter says these quotes rarely are the lowest because the Web sites charge fees just as agents do to get commissions.

The lowest quotes, as with phone shopping, are likely to come from direct sales firms, principally GEICO Direct and Amica Mutual. The major drawback is that these firms want your business only if you are a very good risk with no violations or accidents. But if you fit the profile, buying from them on the Internet can work for you.

Such quotes will usually be lower than any from an agent, but double-check an agent's quote if you qualify for special discounts, especially if you're insuring your home and car with the same company. In that case, you might do better with an agent than anywhere online.

Once you have two or three of the most promising quotes, you want to be sure the company you are considering will be able to pay a sizable claim if you ever have to make one. For a quick read on that, look up the insurer's financial strength ratings. Several competing companies, including A.M. Best, Duff & Phelps, Moody's and Standard & Poor's, offer such ratings. They were once tricky to find but are now widely available on the Internet.