My son recently moved to North Carolina and needed to buy a used car and his first insurance policy. “I can help with the insurance,” I suggested, eager to be helpful but also to experience the process through the eyes of a millennial.
I think I understand auto insurance and recommended coverage and liabilities levels and deductibles that I felt were suitable, even conservative. To get started, I suggested he find the type of car he was looking for online so we could use the model and the VIN of an available vehicle (easily found online) as placeholders.
The most natural first step was to reach out to my own insurer. I cannot say I recommend them because, like many customers, I have never made a claim. My total interaction with them consists of paying an invoice once a year.
The quote for my son was exorbitant: $3,400 a year. We were simply told, “That’s the price the computer says it is.” End of discussion, unless I was wanted to reduce coverage levels, which seemed like an odd thing for an insurer to suggest.
Now, I live in Massachusetts, which has its auto insurance oddities and limited carrier choice, and maybe I have been paying the price of working with a direct-to-the-consumer carrier, albeit a very reputable national brand. So now it was a case of having to shop around, and from the point of doing research I was delighted.
My first instinct was to find an independent agent who could advise my son on coverage in his local area. My son was not convinced. He has been inundated throughout his life with ads and promotions for the big brand names GEICO, Nationwide, State Farm, Farmers and Allstate and the local agent only sold policies from insurers he had never heard of. He compared it with wanting a new cell phone and choosing a store that did not sell Apple or Samsung phones.
It’s all about the relationship, I told him having a person who will be there when you need help, like now. Now, in the interest of fair disclosure, it was Friday morning and his plan was to car shop over the weekend. The first agent was busy all day and asked us to call back on Monday (after 9 a.m.). The second took down details but because most of my son’s driving record was in Massachusetts, not North Carolina, he did not want the business. The third agent wanted my son to make an appointment to visit, and failing that, to complete and fax back his new client application. I had to explain the meaning of the word “fax” to my son.
My son was not impressed with these “fuddy-duddies” and time was marching on. So we went price shopping online his preference from the start. My son wanted to know why there was no way to quickly compare multiple options, such as by using Expedia for travel, Yelp for restaurants or even RateMyProfessor for college professors.
He was not saying he necessarily wanted to buy online, but wanted to narrow down his options. As for the online quote engines, you practically need a degree in auto insurance. There is almost no chance a first-time buyer could understand the options. Some insurers do make it easy and offer default coverage and liabilities, but frankly some of those defaults are simply disgraceful.
One quote engine we used was for the largest auto insurer in North Carolina. The price was good ($1,200), but I still wanted him to have a local agent, which the company offered. By now it was Friday afternoon and the office of the most convenient agent had closed for the weekend. So we telephoned the call center. Like many people, we wanted validation to make sure the selections were appropriate. The agent was very friendly and helpful. She was able to pull the online quote and suggested no changes and then emailed a confirmation, but with a slightly different price ($1,300). That bothered me. The $100 was not a deal-killer, but maybe one of the selections was wrong, so we called back. The friendly agent had gone home and we spoke with a rather brusque agent, who was probably having a bad day. He said, “We don’t look at the online system. The numbers are the numbers. If it is cheaper online, buy it online.”
This prompted us to seek out a second company agent one that was not so convenient, but the agent was open on Friday afternoons. This second agent was also helpful, but again, with no changes to the coverage, offered another price ($1,380). So much for omni-channel. My son asked what he would do if/when he found a car over the weekend. He was told he must contact the call center.
So we tried another option, a direct insurer which were proud of its various JD Power awards for customer service. The online quote engine offered not the cheapest price we’d seen, but it was reasonable ($1,254) so we contacted the call center and they confirmed the price, and were the first to suggest different options. We asked for an email copy and wow, when it arrived, it was the same price. To test the process, we called back a little later and spoke with a different agent. He pulled up the quote, nothing had changed. That might not seem like much, but it did seem like a major leap forward at the time.
I did not want my son to be faced with surprises when he went to a car dealer (an experience in its own right); I wanted him to be able to provide an exact VIN and get be covered. We knew that might affect the cost marginally but everything else would be in place. As it turned out, he found a car on Sunday afternoon, and getting a policy number was the easiest part of the process. It turns out that what he really needed from an insurer was an efficient process.
He/we did not choose auto insurance on price. My instinct has always been to use an agent, but I discovered this does not necessarily guarantee a quality experience. This is especially true for working millennials that want to buy a first car over a weekend which seems to becoming the new normal.
Now let me upfront, there are many agents I know personally who offer a first class experience and I would have no hesitation recommending to him, but this was outside their territory. We were also working on a very tight timetable his car had bitten the dust and he needed to get to work. But to sell insurance to a millennial, things need to change. Looking at my son’s experience, they want to:
- Price shop because they are faced with a crazy range of pricing out there, and above all, they price shop everything. This is how the work. This should not be confused with looking for the cheapest option.
- Shop the big brands, after all that’s what a $1 billion marketing budget adds to the picture.
- Move seamlessly from online quotes to purchase, whether through a call center or local agent. They want to buy from a person because the process is complicated, but they want this to be easy.
- Work with someone outside working normal hours. They have jobs or as parents, we hope they have jobs. Agents cannot close shop at lunchtime on Friday and reopen at 9 a.m. Monday. They also need to move on from the fax machine and new client applications.
- Work with someone that can make life simpler and will speak to them in language they understand.
And what if nothing changes? But things will change because while the industry is focused on products, it is the customer experience that needs redefining. The biggest disruptions in other industries come happen when organizations transform the experience. When the products are complex, it all comes down to the experience.
This blog entry has been republished with permission.
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