Cheap Car Insurance–Paradigm Shift
Often as I sat in my insurance agent office I would hear the door open and after a greeting with our receptionist, I would hear someone say, “I’m looking for the cheapest car insurance I can find. What can you do for me?”
She would normally say something to the effect of “Let me have you speak with our agent and he can see what he can do for you,” ushering the individual into my office.
These quote encounters were normally triggered by an existing client expressing a positive remark about our rates, a response to an advertisement, wanting to insure with us after they saw how claims were handled, or just a drop-in curious about our rates.
This was true until a few years ago when people started using their computers to shop. A whole new industry was born which matched companies with products for sale with consumers who wanted convenience in their purchasing cycle.
The shift in the paradigm then was to develop a marketing strategy to meet the demands of this buying style. It wasn’t necessarily a shift in wanting quality insurance products as much as just wanting the convenience and privacy associated with online purchasing.
As insurance companies saw market share shifting toward online purchases, a whole new approach toward getting information out to the buying public evolved. Even though the majority of insurance is still purchased face to face, technology and millennials’ philosophy of communicating with electronic devices has required insurance companies to respond with advertising programs which are technologically driven. Getting quotes, reviewing coverages, writing applications for insurance and the acceptance of electronic signatures binding coverages are coming more and more into the mainstream of insurance market. There is even one company personifying the paradigm shift by titling the company Esurance, a subsidiary of Allstate. You never meet the agent nor walk into a brick and mortar office. Everything is handled electronically with even the claims adjusting being done by emailing and pictures as much as possible. Autobots are even programmed to give the feel they are human and can empathize with you when there is a loss. (Insurance Automation & Bots (The Sky is Falling, the Sky is Falling.)
With this new approach to purchasing insurance, insurance companies have attempted to reach the buying public with cutesy advertisements, silly mascots, animals and boxes that talk, paper mache squirrels, and even a bot walking up your driveway to help you with a claim.
In an attempt to bring customers to a particular company for a quote, marketers like myself have create websites which disseminates valuable insurance information which hopefully would be helpful to a consumer. They have attempted to capture the consumer’s attention with words and phrases which will generate enough interest to have the consumer go to the websites suggested on the site.
Websites labeled, “Are you paying too much for your car insurance,” “cheapest insurance”, “cheap insurance”, or “best insurance,” are examples of terms acting like loss leaders used at the local grocery store, i.e., ½ gallon ice cream–2 cartons for $4.00, gallon of milk $2.50 limited to two, buy one pizza for $8.00 and get one free, etc. The intent is to get you into the store and then expose you to other items at regular prices. None of these sites actually give you your personalized quote but simply direct you to other sites where you obtain the quotes specifically for your needs.
Sites like TheZebra.com NerdWallet.com; ValuePenguin.com; TheSimpleDollar.com; CheapCarInsurance.com; QuoteWizard.com; Insure.com and AutoInsurance.com, are incredibly insightful with valuable insurance information which educate the buying public, but they still refer you to affiliated companies to get your custom quote.
In summary, purchasing insurance has taken on another dimension with the advent of automation and technology. It no longer mandates a consumer sit down in an office waiting for the insurance agent to work up a quote, listen to the sale presentation, sign papers and pay for insurance coverages settled upon. The flexibility of going online when it is convenient for the consumer, ability to compare coverages and premiums at one location, and make decisions with no sales pressure is very enticing to some.
When a consumer says he or she wants cheap insurance, this new paradigm gives him the option to do just that without having to justify to anyone why he settled for coverages purchased. It still provides the consumer with the option to buy quality insurance with an inexpensive price tag. Some people prefer to drive a Chevy pickup while others want to drive a Corvette. Take your pick when you decide to purchase insurance.
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