Insurance Agents Warn Against Going It Alone
December 03, 2007
Copyright 2007 ProQuest Information and LearningAll Rights ReservedCopyright 2007 Central New York Business Journal
Business Journal - Central New York, The
October 19, 2007 Friday
SECTION: Pg. 13 Vol. 21 No. 42
ACC-NO: 12918
LENGTH: 675 words
HEADLINE: Insurance agents warn against going it alone
BYLINE: Martino, Kristina
ABSTRACTDuring January and February 2007 the number of auto-insurance quotes submitted online increased 29 percent and the number of policies purchased online rose 45 percent compared to the corresponding time period in 2006, according to comScore, Inc. Area insurance agencies and organizations say that buying automobile insurance on the phone, Internet, or via mail without an agent's assistance could lead to the purchase of the wrong coverage.
FULL TEXTSYRACUSE - Area insurance agents say that the growing trend of consumers buying automobile insurance without the use of an agent is risky.According to a Vertis Communications study, 40 percent of U.S. adults surveyed would buy automobile insurance directly via phone, Internet, or mail without first consulting an agent. This rake an 11 percent increase in the trend since 2003, according to Vertis Communications.One cause of this change is convenient Internet access, which allows consumers to search for the lowest price, says Rhonda Cabrinha, certified insurance counselor and vice president of Syracuse-based insurance agency Ellis, Moreland & Ellis, Inc. The results are part of the 2007 Customer Focus Insurance Study, an annual study conducted by Vertis. The survey tracks consumer behavior across a wide variety of industry segments including financial services, credit cards, insurance, publishing, casino gaming, retail, and automotive.Baltimore based Vertis Communications is a provider of print advertising and direct-marketing services to retail and consumer-services companies.In 2006, auto-insurance policies purchased online increased 58 percent while the total number of auto insurance quotes submitted online increased 15 percent, according to Virginia-based comScore, Inc., which tracks Internet transactions.During January and February 2007 the number of auto-insurance quotes submitted online increased 29 percent and the number of policies purchased online rose 45 percent compared to the corresponding time period in 2006, according to comScore, Inc.Area insurance agencies and organizations say that buying automobile insurance on the phone, Internet, or via mail without an agent's assistance could lead to the purchase of the wrong coverage."There's definitely a risk you'll buy the wrong insurance," says Timothy Dodge, director of research and external communications for Independent Insurance Agents & Brokers of New York, Inc (IIABNY). "They are very complicated contracts and not easy to understand."IIABNY represents more than 1,850 independent insurance agencies throughout New York State.The Vertis survey also shows that adults willing to purchase insurance without an agent are more likely between the ages of 18 and 34, single or living together, men and/or Hispanic and African Americans. Adults not willing to buy without an agent are more likely age 65 or older, married and/or Caucasian, according to the study."One reason it's happening I think is that people now think of insurance as a commodity rather than something that protects assets," Cabrinha says.The ability to search for the lowest-priced coverage is widely available on the Internet, but people may end up paying for coverage that won't protect them, Cabrinha says."Where I'm really concerned is I don't think they know what they're purchasing and the value of some of the coverage they're taking," Cabrinha says. "They're not realizing there is different limits and coverage."She says as an example that a lot of consumers have problems differentiating collision and no-fault coverage.Cabrinha says people won't realize the risks of purchasing auto insurance through mail, Internet, or phone until it becomes widely known that customers are choosing the wrong types of coverage. Agents must continue advising clients to purchase insurance through an agent, but Cabrinha says consumers also have to learn the possibility of misunderstanding auto insurance on their own."I think with time it will come to light on its own when people realize they are not covered correctly," Cabrinha says.
GRAPHIC: Photographs
LOAD-DATE: December 3, 2007
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