Buying Car Insurance Online vs. Agent

There is no difference between buying car insurance online or buying it from a car insurance agent. You can choose how to buy car insurance based on your budget and priorities.

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Zaneta Wood, Ed.S. has over 15 years of experience in research and technical writing bringing a keen understanding of data analysis and information synthesis to reach a wide variety of audiences. She studied adult education and instructional technology at Appalachian State University as well as technical and professional communication at East Carolina University. Zaneta has prepared technical p...

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Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...

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Reviewed by Joel Ohman
Founder & CFP®

UPDATED: Jan 22, 2021

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Here's what you need to know...

  • There are many options for drivers when it comes to buying auto insurance coverage
  • Purchasing auto insurance from an agent can give you more personalized service
  • Buying car insurance online can potentially save you money and allow you greater choices
  • It is important for drivers to identify their goals and priorities when it comes to buying auto insurance and decide which route will be the best for them
  • Knowing the insurance requirements in your state and other options for coverage can help you make an informed decision about your own insurance coverage

Although buying car insurance may not be your favorite way to spend money, it is a legal requirement in most states in the U.S.

When it comes to purchasing car insurance, you have choices and options. You can select from different coverage types and limits.

You can purchase your insurance coverage through an agent or even online. You can also use a car insurance price comparison tool to help you save money.

Start comparison shopping today by using our FREE online quote tool! Enter your zip code above!

Do I have to purchase car insurance?


In almost every state, liability coverage is legally required by all drivers. Liability coverage helps protect every driver, passenger, pedestrian, and bicyclist on the road from financial ruin after an accident.

Not obeying your state’s laws regarding car insurance coverage can lead to some severe consequences such as:

  • Imprisonment
  • Fines
  • Community service
  • Driver’s license suspension
  • Vehicle registration suspension
  • Mandatory SR22 insurance

These penalties can vary depending on how many offenses you have had and what state you are located in. In addition to these legal penalties, you can potentially be sued by other parties that you have caused bodily injury or property damage.

Driving without insurance is taking a lot of unnecessary risks.

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Where can I purchase auto insurance?

Whether you are buying your first car or are a seasoned driver who wants to shop around for better rates, there are many different options when it comes to purchasing auto insurance.

You can find a local agent or search online for carriers and quotes.

Be sure when selecting an insurance agent or carrier to do business with that you get referrals and recommendations.

You may also want to check with your state’s insurance department to ensure they are licensed in your state and free of any negative reviews.

Is it cheaper buying car insurance online or over the phone?

Young couple shaking hands with sales agent.

This is a common question for many drivers. In reality, there is no right or wrong answer.

The way in which you choose to go about buy car insurance is a matter of personal preferences and priorities. There are pros and cons to each method of buying car insurance.

If you prefer personalized attention and someone you can sit down with and talk to in person, a car insurance agent will probably best suit your needs.

However, if your number one priority is saving money and you don’t care much for personal interaction, buying car insurance online is probably the way you will want to go.

Keep in mind though that although you may be saving money, you will also be putting in more time.

You will need to make sure you understand or research the insurance coverage required by and available to you. You will also need to find a way to compare these rates and make sure you are comparing the right types of policies to each other.

You are your own liaison if problems should arise between you and your insurance carrier.

On the other hand, if you hire an insurance agent, you will usually be paying a higher premium to do the footwork and research for you.

An ideal solution for one driver may not be ideal for another. It is important to weigh your goals, priorities, and options when deciding on whether or not to go through an insurance agent directly.

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What happens if I have an accident or need to file a claim?

If you need to file an auto insurance claim, you will need to contact your car insurance company’s customer service department or your agent, if you have one.

If you do not have an agent, and sometimes even if you do, your auto insurance carrier will likely assign you a point of contact for all questions or concerns you have that are related to your claim.

The sooner you can report your claim the better.

Some insurance companies require you to make a report within 24 hours.

You may be required to fill out paperwork and answer several questions regarding how the damage occurred. Cooperate with your insurance carrier or agent as much as possible in order to make sure you claim is processed properly and correctly.

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Insurance Coverage Types


If you are not using an agent to purchase insurance, it is extremely important to understand all of your coverage options.

You do not want to pay for coverage you may not necessarily need, and you definitely want to have the insurance coverage that is legally mandated and that will support you financially should you need to file a claim.

Here is what you need to know about the types of coverages you can add to your insurance policy:

Property Damage Liability

In most states, this is a mandatory coverage. If you damage another person’s car or property, your own liability coverage will pay for their damages up to your coverage limits.

Bodily Injury Liability

Bodily injury liability is also mandatory in many states.

However, it applies to medical bills or funeral expenses related to an accident that you are responsible for.

Uninsured/Underinsured Motorist

Although nearly all states require some level of auto insurance coverage, unfortunately, many drivers still ignore the law and drive without it.

In some states, uninsured/underinsured motorist coverage is required by law. If you are hit by another driver who does not have insurance or you are a victim of a hit-and-run accident, uninsured motorist coverage will help pick up the tab.

If you are hit by another driver who does not have insurance or you are a victim of a hit-and-run accident, uninsured motorist coverage will help pick up the tab.

Medical Payments or PIP

It is important to understand that liability coverage only provides for damages you are at fault for doing to others. Liability insurance does not cover your own damages.

If you are injured or need time off of work, your own medical payments or personal injury protection coverage will help pay for your medical expenses and necessary hired help around the house such as childcare or housekeeping.

PIP coverage will even compensate you for the time you had to take off of work due to medical appointments or injuries.



If you are in an accident that damages your car, collision coverage will cover those damages up to your chosen policy limits.

Collision coverage also requires you to select a deductible amount and is usually contractually required if you have a leased or financed vehicle.


Comprehensive coverage is very similar to collision coverage as it is usually required for drivers financing or leasing their vehicle and also has a deductible.

However, it applies to non-accident circumstances such as:

  • Floods
  • Theft
  • Fire
  • Vandalism
  • Natural Disasters
  • Hitting wildlife

Gap Insurance

If you have a car that is leased or financed, gap coverage is very important.

With vehicles depreciating quickly, car owners can quickly find themselves upside down in their loan.

Car depreciation can create a financial problem if they have an accident that totals their vehicle and their car insurance company doesn’t compensate them the full amount that is left on their loan.

Gap insurance is created for these situations and fills in the gap, so to speak.

Rental Car

If you have filed a claim and your car is being looked at by an insurance adjustor or is being fixed, rental car coverage can help provide short-term transportation while you wait.

Usually, this type of coverage is good for a certain dollar amount per day for a certain number of days.

Whether you are simply shopping around to see if you can save money on your auto insurance premium or are a new driver, it is important to identify your goals and priorities.

You may find that purchasing insurance from an agent is better for you than shopping online or vice versa. You may also find that using an online price comparison tool will help you save money.

Start comparison shopping today by entering your zip code below!

Free Car Insurance Comparison

Enter your ZIP code below to view companies that have cheap car insurance rates.

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