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5 Reasons Why Car Insurance Cost Less Online

Team AckoJan 17, 2024

Have you ever compared car insurance quotes online? If you have, you would have found that the premiums differ across different plans. Moreover, car insurance prices are different when you buy from a middleman (agent or broker) and when you buy online, directly from the insurer’s website. Have you ever wondered why there is a difference in the rates?




Online purchases are always priced on the lower side and that is why most of you prefer purchasing online. The same is true when buying car insurance online in India. When you buy the policy using the online medium, the prices are reduced as compared to the offline medium.

Why Car Insurance Cost Less Online

1. Lower administrative costs

Online platforms eliminate the need of having physical insurance offices and branches from where you can buy the policy. The company develops its website and offers its plans online with the list of benefits and also the premiums that you are supposed to pay. Moreover, the whole process of buying the policy is also done online. All these factors cut down on the administrative costs involved in issuing the policy. This reduction in administrative costs results in lower car insurance quotes.

2. No distribution costs

Offline car insurance policies are sold by agents and brokers. These middlemen charge a commission from the insurance company for selling the policies. The commission paid to middlemen is recovered from you, the policyholder, in the form of distribution costs. In case of the online platform, however, no middlemen are involved. You can simply buy the policy yourself cutting down on the middlemen and their commissions. This reduces the distribution cost for the company which, in turn, reduces car insurance prices.

3. You can shop around for highest discounts

Online car insurance policies offer various discounts in premiums. For example, new-age insurance companies might offer some deals on their website. The available discounts and their rates vary across policies. When you shop around, you can search for the highest discount rates which are available. The higher the discount that you can find online, the lower would be the car insurance quotes. Thus, by allowing you to shop around for discounts, car insurance online in India is cheaper than buying the policy offline.

Also, Read: Car Insurance Online Vs Offline: Which is Better?

4. Ease in comparing policies lets you enjoy lower premiums

Every car insurance plan offered by every insurance company comes with a different premium rate. When you compare the available plans online, you can easily find the policy which has the lowest premium rates without compromising on the needed coverage. This is also another reason why buying online leads to a lower premium rate because it offers the benefit of comparison.

5. You can choose the add-ons which are required

When you buy a policy offline, the middleman might bundle optional add-ons into your policy to drive up the premium and, consequently, the commission the middleman can receive. Online purchases, however, offer you complete transparency. You can choose the add on cover that you require and get rid of the unwanted ones. Moreover, you can also shop around for policies with affordable add-ons. When you are in control of the fixing the coverage of your policy, you control the premium and car insurance prices become lower.

The online medium of buying car insurance is simple and also beneficial as it helps you in saving on the premium cost. Both insurance companies and insurance aggregators understand the benefits of online car insurance policies and offer the policies online. There are premium calculators which take in the details of your car and calculate the premium of the car insurance policy. The calculator also lets you compare the premiums of different policies which in turn helps you in finding the lowest premium rate. So, use the online mode of buying car insurance and you can save your hard-earned money on premiums.

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