5 tips for handling insurance matters on your own

Allie Johnson

Shop for insurance on your laptop. Get a coverage question answered via an online chat. File a claim using an app on your smartphone.

A new report from Deloitte Research shows that a growing number of consumers, especially younger ones, are handling their insurance issues — from shopping to questions to claims — with the click of a button.

“They want to be able to do what they need to do in terms of insurance, whether that happens to be on the phone, on their laptop, on their tablet or on their smartphone,” says Sam Friedman, insurance leader at Deloitte Research.

Tips for the go-it-alone consumer

If you’re going to handle your insurance needs on your own – from shopping to claims – insurance experts offer these five tips:

1. Educate yourself about insurance.

Whether you’re buying auto, home, life or another type of insurance, take the time to become an informed consumer, experts say.

“Most states have shopper’s guides that really take you through, step by step, and you really can figure it out yourself if you spend an hour on it,” says Robert Hunter, director of insurance for the nonprofit Consumer Federation of America.

2. Research companies before you buy.

“Be careful when you shop online,” Hunter says. He recommends researching price as well as complaint histories for the insurers you’re considering.

He also suggests consulting your state insurance department’s website. “Typically, for auto insurance, they have five or six hypothetical people in every ZIP code,” he says. “You can pick the hypothetical person most like you, look at complaint ratios and get specific quotes.”

3. Make sure you get enough coverage.

Without an agent to quiz you, it can be tempting to pick low coverage levels to save money, some experts say. So take time to calculate your needs. For example, if you’re buying life insurance online, Ted Jenkin, co-CEO and founder of oXYGen Financial Inc., recommends finding an online life-insurance-needs calculator and plugging in your own numbers. Jenkins’ Georgia-based financial services firm caters to Generation X and Y clients.

“You shouldn’t do it by rule of thumb – ‘Oh, I read in a magazine that you need four times your salary,’” Jenkin says.

For auto insurance, don’t just go with your state’s minimum liability requirement, says Michael Gardner, an agent with BNC Insurance Agency in Rye Brook, N.Y. “Most states’ minimum requirements wouldn’t cover a broken arm,” he says.

4. Find out what your insurer offers.

Insurance companies are serving up many new tools for customers, such as claims apps for mobile phones, online chat capability and alerts via social media. Many claims apps for mobile phones let policyholders snap photos of an accident scene, conduct interviews with witnesses on video and find the closest insurer-approved repair shop. However, the Deloitte survey found that three-fourths of consumers didn’t know whether their insurer offers mobile apps. Those who did know about them found them useful.

Also, Friedman says, some insurers now offer personalized severe weather alerts via Twitter. “There are companies that if you’re in a tornado or hurricane zone, or any severe weather or natural phenomenon situation, you can sign up and they will tweet you if you’re at any risk,” Friedman says.

5. Learn how to file a claim.

One drawback to mobile apps for claims is that you won’t learn about their features by using them frequently, so it’s important to download them and familiarize yourself with them in advance.

“Don’t wait until a claim happens to educate yourself,” says Friedman, noting that you may be injured or shaken up at that point. “That is usually the worst time.”

The connected consumer

The Deloitte report, “The Voice of the Personal Lines Consumer: Buyers in the Driver’s Seat,” highlights consumers’ increasing demand to be able to handle insurance needs quickly and conveniently through web and mobile technology – starting with shopping.

The report, which analyzes results from a 2011 survey of more than 1,000 home insurance policyholders and an equal number of auto insurance policyholders, shows younger consumers often prefer buying directly from an insurer, rather than using an agent. In fact, for home insurance, 65 percent of respondents age 18 to 25 and 55 percent age 26 to 35 bought directly from an insurer. For auto insurance, 55 percent of people 26 to 35 did the same.

The report says that younger consumers surveyed “were more likely to go direct, perhaps in part because of their greater proclivity to live their social lives and do their business online.”

Consumers surveyed – again, especially younger ones – said it was very important to have a variety of choices for communicating with their insurance companies. For example, half those surveyed said that if the prices were equal, they’d be very likely or likely to switch companies to enable communication with an insurer through several channels – for example, online chat, social media or mobile apps.

“The majority of people want to be able to have options,” Friedman says.

Benefits and drawbacks of going direct

Insurance experts say shopping online — and using technology to handle other insurance needs directly – can have big benefits.

Online shopping, for example, gives the consumer more control, some experts say.

“The benefit of shopping online is that you get an excellent opportunity to see prices and compare companies,” says Jenkin, the Gen X and Y financial expert. “And what’s really good is that there’s absolutely no pressure.”

However, Jenkin still recommends consulting a professional agent or financial planner when considering your insurance options.

And for savvy consumers who do lots of research, shopping online and buying direct can boost the chances of finding the right company and policy, says Hunter, the Consumer Federation of America official.

“If I walk into a specific agent’s office, that agent might only have five companies – and, for me, they might be the worst five companies,” Hunter says. Or, he says, the agent might work exclusively with one company – which would offer the consumer even fewer policy options.

Also, he says, more consumers going online to shop, pay bills and handle issues – such as making minor changes to policies – might lead to lower premiums.

“It’s much more efficient for an insurer to sell policies and service policies electronically, so if some or all of that savings is passed on to consumers — all other things being equal — consumers should get better rates,” Hunter says.

But some experts say that because insurance is so complicated, handling insurance needs on your own does have its drawbacks. For example, an agent can help make sure an insurance application is filled out accurately, to reduce the chances of a claim being denied later because of faulty information, according to Gardner, the insurance agent.

Also, an agent can ask questions to make sure a consumer gets enough coverage, as well as any necessary add-ons, to avoid surprises when it’s time to make a claim, Gardner says. Furthermore, when a policyholder does file a claim, he says, an agent can deal with claims adjusters and negotiate on behalf of the customer.

“It’s quick and easy,” Gardner says of buying online and going it alone, “but quick and easy isn’t always the best.”