I Tried an Insurance App – This is What I Found.
Technology and e-insurance apps are taking over the industry. I dove in to see what all the fuss was about.
By Craig Bailey, CIC
Digitally-inclined members of younger generations are aging quickly. They’re buying cars, financing homes, starting families and (you guessed it) buying insurance.
Marketers and innovators took note – and now you can buy insurance straight from an app on your phone. As a third-generation insurance broker with a young son of my own, this was something I had to check out.
Insurance apps come in many shapes and sizes, so I picked one that was marketed as quick, easy and cheap. Its interface was bright and friendly, and its communication style was upbeat and positive. The questions it asked me about my property and possessions were all simple, “yes-or-no” answers.
Before I knew it, I’d gotten a quote for my homeowners insurance.
Yes, it was cheap. Yes, it was easy. But how did it stand up to my existing broker-designed plan? Let’s take a closer look.
The limits I got from the app’s plan were comparable to those on my existing policy. Seemed like good news for insurance app-users to me. I wondered, though, where those limits came from. If my broker didn’t find them, how did the app? My broker knows me personally. To design my plan, he asked me a long list of comprehensive questions. Our conversations covered far more than the app’s “yes-or-no” set could have ever touched. That’s how I learned that the app’s business model didn’t bank on consumers’ curiosity.
I requested a copy of my policy so I could compare the finer details. What was I covered for, and which liabilities had it considered? After all, a lot of topics we ask our clients about weren’t even options to explore in the app. My request was met with a series of electronic messages touting technical complications in the software and an influx of others’ messages bogging down the system. One message offered me a sample policy and encouraged me to buy the plan anyway. After several weeks of this kind of back and forth, I noticed that the email chain had looped back to the beginning. I wasn’t getting a copy of my policy until after I’d bought it.
I always tell my clients that there are two times you can learn about your coverage: before a claim and after a claim. These apps make it easy to fall into the former category. They are marketed toward first-time and less experienced insurance buyers, capitalizing on a population less likely to question their product. The speed of instant insurance actively factors out the time it takes to make sure the consumer has the right insurance.
Hard-to-reach policies, enthusiastic messages rewarding the user for simply paying premium, and non-personal questions make it easy to be complacent. As the future quickly approaches, make sure you’re not one of the complacent ones. Always question your policy. Know what you’re buying – before it’s too late.