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When buying any item, two things generally come to mind. Cost and convenience. While some buyers look exclusively for the best prices, others are willing to spend a few extra dollars for convenience. 

For example, insurance is something that would have required you to visit a brokerage, provider or financial institution in the past. However, you can now buy various forms of insurance online and you might even find a better price than you would in person. Below we’ll discuss whether buying insurance online is the cheaper way to go, to help you make the best decision for your lifestyle.  

How Do You Buy Insurance Online?

Before we discuss the price comparison between purchasing insurance online and with a physical provider, let’s discuss how the process goes if you do everything over the web. For starters, a major benefit to online insurance is that signing up is typically simpler and less time consuming than in person. All you have to do is:

  • Research Your Provider – Don’t go with the first brokerage or provider you find. Take time to make sure your insurance source is a trusted business offering the best policies and premiums for you. 
  • Get a Quote – Once you’ve found a reliable provider, you should be able to get a cost estimate for each product or program somewhere on their website. In fact, many sites have a free quote calculator that you can use without an account.  
  • Create Your Account – If you need to sign up to get a quote or you’ve decided that this provider/broker is right for you, creating an account should be relatively easy and only take a few minutes.
  • Input Your Information – As it would be in person, you’ll need to fill out various personal and financial details to get your actual premium and purchase your insurance policy. These details can include but aren’t limited to your:
  • Name and address
  • Birthdate and citizenship status
  • Social Insurance Number (SIN)
  • Occupation
  • Financial status (income, debts, etc.)
  • Buy Your Policy – Once your details are filled out, the provider’s quoting engine should offer you several policy options. Afterward, you just have to decide which one you want and start making payments with your debit or credit card.
  • Keep Records – Soon after your first payment is made, you should receive an email that details your account information and policy terms. Be sure to print or keep digital copies of these documents for future use.  

Keep in mind that every insurance provider requires different data in order to give you a proper quote. For instance, life or medical insurance may require you to input more sensitive information, such as any health conditions you have. However, with auto insurance, your driver’s history and vehicle will be more essential.

Check out these 5 insurance mistakes you should avoid

Buying Auto Insurance Online

Auto insurance is necessary for thousands of Canadians. It’s also one type of insurance that plenty of people now buy online, which can be highly advantageous because:

  • Theoretically, this lack of personal service should lead to fewer fees
  • You can easily research many different insurance providers and policies
  • You can sign up, buy a policy or file a claim 24/7 from the comfort of home
  • Binding a policy only takes a few minutes or hours (instead of days/weeks)
  • You’ll have instant access to all documents from any internet-ready device
  • You have (almost) full control over your account and policy  

That said, auto insurance may not be the best type to buy online because:

  • A professional agent can give you better information than a website
  • Finding the right policy online can be complicated
  • Figuring out your policy can be tedious without personal help 
  • Even speaking over the phone can be unhelpful and time-consuming
  • You’ll have to file your own claim, which can also be complicated
  • There’s less opportunity to negotiate or establish a personal relationship

Find out if your insurance covers your friend driving your car

Buying Life Insurance Online

Another type of policy that’s purchased every day is for life insurance, which protects the buyer’s family members, properties and finances when a claim is filed after death. In this scenario, there are two categories of insurance policies you can buy:

  • Underwritten Life Insurance – Is what you get when you apply with a broker or agent. Because someone needs to underwrite your application and manage your policy, the costs can be higher than online insurance. However, you can qualify for more coverage, especially if you’re young and healthy. If you’re elderly or have serious medical conditions, you may not qualify for as much but at least the service will be better.
  • Guaranteed-Issue Life Insurance – Is available online and policies can be slightly cheaper initially since less underwriting is involved. Plus, your health won’t be as important during the approval process. That said, guaranteed-issue policies are usually smaller (often only up to $25,000) and can lead to higher costs because riskier clients can qualify. Even if you’re young and healthy, you could end up paying the same amount as someone old or unhealthy.  

So, while your policy might be cheaper and easier to get online, you may want to get underwritten life insurance from a broker or agent, if only to get the best service and potentially qualify for better conditions. 

Square One insurance

Buying Home Insurance Online

Homeowners insurance is another essential security to get if you’re buying a house. Typically, every provider uses a system to calculate how much home insurance you qualify for. Your quote will be based on factors like: 

  • The state of your finances and credit
  • Where the home is (neighbourhood, natural disaster risks, etc.)
  • The size and condition of the house/property
  • What emergency services are nearby (fire & rescue, police, etc.) 
  • What safety and security hazards the home has (pool, fireplace, etc.) 

Once again, buying home insurance online or from an agency is up to your preferences. After all, it’s handier and cheaper to buy online because there’s no one to collect a commission. It can also be easier to qualify since the approval process is more straightforward. However, some providers don’t offer home insurance online.   

That said, the quote you get from an online calculator may not be as accurate as one from an insurance provider. You may think you’ve found a good deal, only to realize your quote was automatically generated and you could have gotten a  better price from an agent. Overall, homeowner’s insurance is not the best situation to cut corners.  

Wondering about CMHC insurance? Find out by reading “what is mortgage default insurance”? 

Best Online Insurance Providers

 Type of Life Insurance Availability Number of Partners
emma- Term life insurance
- Permanent life insurance
PolicyMe- Term life insurance
- Critical illness insurance
All of Canada-
Policy Advisor- Term life insurance
- Whole life insurance
- Disability life insurance
- Critical illness life insurance
- No medical life insurance
BC, AB, MB, ON16 logo- Term life insurance
- Permanent life insurance
- Critical illness life insurance
BC, AB, SK, MB, ON, NB, NS50+
Insurance Hotline- Term life insurance
- Permanent life insurance
All of Canada30+

Pros and Cons of Buying Insurance Online vs. From an Agent

Different insurance providers offer different policies. Since there are so many brokers and agencies in Canada, research is the key to obtaining the best deals. However, there are several clear pros and cons to buying insurance online and in-person:

Pros of Buying Insurance Online 

  • Cheaper – As mentioned, one of the main selling points of online insurance is the cost. Most online insurance providers have fewer service or commission fees.
  • More Options – Instead of a long in-person or phone conversation, you can research many providers and brokers, then get a few basic quotes from onsite calculators within the same day.  
  • Easier Approval –  While you must provide the standard details, insurance can be easier to obtain online, since much of the process is automatic and an agent won’t be delving as deeply into your financial and living situation.
  • Convenient – If you have internet access, you can buy insurance anywhere in the world, any time. No need to plan your day around a visit to an agency or spend hours on the phone, only to be left on hold.
  • More Control – When purchasing insurance online, you don’t have to negotiate with an agent or pay them to overlook the policy. You have control over what you buy and how you’ll be making payments.  

Cons of Buying Insurance Online

  • Less informative – Online insurance is generally “what you see, is what you get”. You may not learn everything you need or get your questions answered from an overly complicated or simple website. 
  • Less Coverage – The fact that it’s easier to qualify can actually be a detriment. Because profiles are automatically processed, providers are taking more risk and cannot offer their clients as much coverage.
  • Less Value For Your Money – Since there’s more risk involved, providers charge standard rates to a larger pool of potential clients. You might pay the same price for the same coverage as someone who should be charged more.
  • Lack of Help – It may not be the best idea to buy online insurance if you’re less familiar with the process. If you do need help, it can be a pain to get an agent on the phone or hear back from them by email.
  • Fewer Options (Sometimes) – Online, you can only pick the options on a website, whereas a good agent or broker might find you a better deal on a policy that isn’t offered online, such as certain forms of home insurance.

Pros of Buying Insurance In Person

  • Better Service & Information – A professional can usually give you a more accurate quote and answer your questions better than a poorly designed website.
  • More Possibilities – If you establish a good relationship with your agent or broker and continually purchase insurance through them, they might make you a preferred client and offer you even better deals in the future. 
  • Tighter Security – Online, it can be difficult to tell if a provider is legitimate or offering the best prices, whereas a real agency will have an address and business credentials to confirm or report to the authorities.     

Cons of Buying Insurance In Person

  • Upselling – Agents have to push their company’s products to prospective clients. Even brokers may only do business with specific providers. You may get sweet-talked into an unsatisfactory or expensive policy.
  • Limited Options – It can take time and effort to speak with an agency, so you might be tempted to stay with them, even if their products aren’t great. However, online insurance allows you to quickly compare multiple options. 
  • Less Convenient – You can buy or cancel insurance whenever you want online, whereas an agent has control over when you can speak with them, what happens to your policy and when your documents are delivered.
  • Longer Wait Times – It can sometimes take days or weeks for your policy documents to become legally binding and sent to you. However, you should have near-instantaneous access to an online insurance policy. 

Not sure what type of insurance is best for you? Find out here

How to Decrease The Cost of Insurance

Whether you buy it online or in person, there’s no doubt that some types of insurance are essential for life in Canada. Don’t worry, while some policies can be pricey, there are ways to get your premium lowered, such as:

  • Increase Your Deductible –  First, try paying a larger deductible. Although this will also increase your payments, you may save money and receive a larger claim someday. 
  • Reduce Your Coverage – Another way to lower your premium is to ask for less coverage. While this can lead to a smaller payout, your provider won’t consider you as risky, so your payments and deductible may be lower.
  • Compare Quotes – There are plenty of insurance providers and policies across the country. Make sure to do lots of research and ask your provider if they can match the prices of others.
  • Bundle Policies – You might also save money by buying several types of insurance from a multi-purpose provider, instead of applying and making payments all over town.
  • Improve Your Finances and Credit – The healthier your income, debt levels and credit score are, the less risky you’re considered and the less you’ll pay for insurance, especially with a provider or broker.

Bottom Line

When it comes to purchasing the best insurance policies for your lifestyle, research is key. Online insurance providers offer policy calculators, comprehensive questionnaires, and allow you to compare multiple offers. All of this can make finding an affordable policy more convenient. Just keep in mind that if you’re in need of a more complicated policy or simply want to speak with a human, then getting on the phone with multiple insurance providers might be the best option for you. 

Bryan Daly avatar on Loans Canada
Bryan Daly

Bryan is a graduate of Dawson College and Concordia University. He has been writing for Loans Canada for five years, covering all things related to personal finance, and aims to pursue the craft of professional writing for many years to come. In his spare time, he maintains a passion for editing, writing screenplays, staying fit, and travelling the world in search of the coolest sights our planet has to offer.

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