Five things to keep in mind about auto insurance offers made through social media

Log on to Facebook or Twitter, and you’re likely to see a number of auto insurance offers pop up. Many promise to lower your current rates or save you hundreds of dollars. Some of these deals are so enticing that they may even sound too good to be true. But are they?

To be sure, the come-ons are alluring:

• “I can save you 40% on your insurance! Call for a quote today!”

• “Save $500 or more on your Auto Insurance Fast, free, no obligation quotes. Start now!”

• “What Is The Cheapest Auto Insurance In NY – How to Get Really Cheap Car Insurance in New York.”

Here are five tips to help you look at auto insurance offers on Facebook and Twitter with a critical eye.

1. Find out who’s behind the offer.

Experts warn that auto insurance offers delivered via Facebook or Twitter need to be scrutinized carefully to weed out scams.

Coming across a message that promises to save you 40 percent on auto insurance might make your fingers twitch in anticipation of clicking on a link to a website. Before you do, see whether a name, company or website you recognize is mentioned along with the offer.

Because placing ads on social media is easy and inexpensive — and because it costs nothing to post messages on Facebook and Twitter — many smaller insurance agencies use this marketing tactic to compete with bigger players in the insurance industry, says Pat Alexander, a consultant for insurance agencies. Before signing up for anything, find a phone number and call the company. You’ll be able to better verify the offer and figure out who’s behind it.

2. Recognize a scam.

A post on Facebook that invites you to call for an auto insurance quote may be harmless. But if you’re asked to pay a fee upfront when you call – before even receiving the quote – be wary. Reputable companies generally do not charge upfront fees or ask you to pay an administrative fee before signing up for insurance.

If you’re concerned about the company’s legitimacy, don’t click on the link listed for the company website. The link can lead you anywhere the person or company behind the website wants to take you. It may look like the real thing, but actually could be a fraudulent site. Rather than clicking on the link, type the website URL into your browser. This way, you’ll know exactly where you’re going.

3. Evaluate low-ball offers.

Rob Drury, executive director of the Association of Christian Financial Advisors in San Antonio, says insurance rates advertised on Facebook and Twitter may be “low-balled.” In other words, they may be actual rates, but they’re based on best-case conditions that many consumers won’t meet, Drury says.

“All premiums for any type of insurance are approved by each state’s insurance commission, and all rates for a particular company are the same regardless of the medium of the sale,” Drury says. This means you’ll end up paying the same premium for a certain type of policy regardless of whether that policy is purchased online, over the phone, or directly from an agent or broker.

4. Understand your needs.

Even though there are plenty of Facebook and Twitter ads offering legitimate quotes and low prices, they may not offer what you need, says Glenn McGregor, a certified financial planner at Bernard R. Wolfe and Associates Inc. in the Washington, D.C., area. “Lower cost equals less insurance, either in the amount or (length of coverage) involved,” McGregor says.

Many factors, such as age and gender, go into the final price of your insurance premium. Plugging these variables into a quote may cause it to go up or down. If you see an appealing quote online, it may be worth contacting a financial planner to discuss your options, McGregor says.

5. Be smart about social media.

With so much information available online, consumers – especially younger ones – are using the Internet to learn more about insurance before making a purchase. “Once they go in to buy insurance, they’ve already done their research through social media,” says Alexander, the insurance consultant.

There’s no harm in using Twitter and Facebook to jump-start an insurance search. To find reputable players in insurance, take a careful look at their messages on social media. If the messages are from an insurance agency, for instance, check out whether the agency is promoting community efforts or offering solid advice, such as how to report claims, Alexander says. Agencies that are involved in the community are much more likely to be reputable and have your best interest at heart.

–Rachel M. Hartman