Go Online, Get Insured

SAN FRANCISCO (03/22/2000) - Everybody needs insurance. And the Web is (slowly) becoming a great place to buy it.

I'll say this right up front: I hate insurance. It's expensive, confusing, and no fun. I'll avoid shopping for it as long as possible, and once I'm insured, I'll gladly pay a slightly higher premium if it means never having to think about it again.

Nonetheless, as homeowners (or tenants), drivers, and parents, we all need the stuff. And the Web can take some of the misery out of finding and buying it.

Better yet, going online for insurance can save you a bundle right now.

But don't expect to accomplish all your insurance-related business with a few clicks in your Web browser just yet. For various reasons, insurance companies are still playing catch-up with the rest of corporate America when it comes to the Internet.

The move online means big changes for the slow-footed insurance industry.

"Insurance has always been a secretive business," explains David Sterling, chairman and CEO of insurance brokerage firm Sterling and Sterling. "The theory has been that the less [a consumer] knows, the better off [insurance companies] are. It's a model that supports a huge network of brokers who make a living off commissions."

I found that observation vaguely comforting: I'm confused because I'm supposed to be, not because I'm an idiot. Over time, though, the Web could change everything that's currently involved in buying and using insurance.

Shop and Save

First the good news: A little comparison shopping online can reap big rewards.

In fact, Todd Eyler, a senior analyst with Forrester Research, estimates that the average consumer can save at least $500 annually on insurance just by shopping around. Without the Web, Eyler says, "that process has been so tough that no one does it." You'd have to call several agents, maybe wait for forms to arrive, and probably meet face-to-face with a broker or two.

When you shop online, on the other hand, you can compare rates at your convenience, in a matter of minutes. "You can fill out one too-long form and get quotes from many insurance companies," says Eyler. "The value of the Net versus going to just one agent is that the agent will give you quotes from the company that gives him the highest commission. These sites will give you more competitive quotes."

You can get these quotes--often instantly--from insurance portals like Quotesmith.com, InsWeb.com, and Quicken Insurance (www.insurancemarket.com), as well as from the newer, less full-featured QuoteToday.com. Some of these sites also include articles about how to choose the right insurance; links to insurer ratings; and other helpful information. Other useful resources include Insure.com, an industry news site; and Gomez.com, which reviews insurance Web sites.

All of this is great when you're simply browsing around to see whether another insurer can beat your current company's premium. In most cases, however, you'll eventually reach a point where you need to talk to a broker--if only electronically--before the deal is done. The reason? Selling insurance is an intricate process under optimum conditions, and it's made far more complicated by laws that vary from state to state. Moving the transaction online evidently creates a logistical nightmare.

Still, a few brave companies have taken up the challenge, and no doubt more will follow. For instance, insurance giant Allstate recently announced that it would start selling policies online sometime this year.

Currently, though, some critics of online insurance contend that it often functions as little more than a lead generator for the industry. Which is why you shouldn't fill out online application forms recklessly--once you start submitting your personal data to insurance companies, you're guaranteed to generate telephone calls from salespeople. And bringing a swarm of eager insurance agents down upon your head is no way to improve your life.

What's Here Now

Right now, the only types of insurance sold online without requiring any offline interaction are auto, term life, and some health policies. These forms of insurance are simple enough that you can secure them with a Web interview and a credit card transaction. Most other types of insurance require that you relinquish specimens of bodily fluids or at least a signature. But you can't submit a blood or urine sample over the Internet, and few states currently allow insurers to accept digital signatures.

Jean-Bernard Duler, the CEO of Esurance.com, an Internet-only start-up that sells its own auto insurance over the Web, explains, "There is a lot involved in taking care of the regulations and programming for each state. It has been a real pain, but we are getting it done." At press time, Esurance.com sold auto insurance in only a handful of states; other car insurance sites, such as Ecoverage.com, were even more limited geographically.

But if Esurance.com lives up to its ambitious goals, it will be licensed to provide car insurance in most of the United States by the time you read this.

And I liked the quote it gave me: A six-month policy from Esurance.com for my car in California (where I lived until recently) cost about $250 less than the policy my current insurer offered. (My new home, North Carolina, wasn't yet covered when I looked.)Health insurance, because of its complexity, is more difficult to sell on the Web than term life and auto insurance. But one early entrant into the arena is HealthAxis.com. This insurer allows you to complete an application online, and it plans to sell health policies in 37 states by midyear.

Another new face is Insurance.com, a site that hopes to streamline the whole cumbersome insurance-buying process. (At this writing, the site remains in the planning stages, but it should have launched by the time you read this.) Funded by Fidelity, Insurance.com intends to become the ultimate insurance supersite, with comprehensive information for anyone who's getting married, having a baby, or buying a house or car. The plan is that you'll be able to buy all your insurance directly from the Insurance.com site, but not right away. Company president Lou Geremia says the insurance industry needs time to acclimate itself to the Web: "Our focus now is content, and as the products develop, we will introduce them."

Stake A Claim Online

Wherever you buy your insurance--online or off--ask whether you will be able to handle part or all of any claims-filing process via the Web. (Assuming that's something you want to do; don't feel sheepish if you would prefer to get a little hand-holding from a real live agent.) Some traditional insurance companies allow you to file claims online; others provide the necessary forms for you to download, fill out, and return by snail mail. But if you buy from a broker that you found through a quote site such as InsWeb.com, you'll probably file your claims the old-fashioned way--by calling the broker and filling out paper forms. And even built-for-the-Web Esurance.com handles its clients' claims over the telephone, via its 24-hour customer service operation.

Future So Bright

Call me a dreamer, but I have a vision. It's midnight; you need health insurance. You go online, comparison-shop, find a great deal, and secure the transaction right then and there. When you go to the doctor, you just provide a URL and your user name, and your claim gets filed through the Web site. And when it comes time to pay the bills, you simply log on, review your visits to the doctor, see how much was paid by your insurer, and confirm what you owe.

Lose your health insurance card? Print another. Need your kids' immunization records for school? Print them out, too. Want to transfer your medical records to a different doctor? Just give the new MD your user name and password.

The insurance experts I spoke with assured me that all of this will become a reality--though it won't happen in the immediate future. Today, it makes sense to use the Web for what it's currently good at: gathering information. By getting a quote at InsWeb.com, for instance, I've already slashed my family's monthly health insurance premium by two-thirds. (Yes, you read that right.) My new policy doesn't come from a virtual insurance company, but from a traditional, offline agent--in fact, one located in the same building as my office.

And even if you're happy with your current provider, a little online research can't hurt. As David Sterling says, "The very smart way to shop would be to shop on the Net, then call your local agent and tell them the quote you got.

Right now they can probably match or beat that quote." That way, you'll get the best of both worlds: your friendly neighborhood agent and the best rate going.

Christina Wood is a contributing editor for PC World.

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