Insurance cheaper on the Internet: study

Canadian Direct Insurance, a company in B.C. and Alberta that sells insurance by telephone, says it has conducted a market survey that suggests Alberta drivers could reduce their auto insurance premiums by up to 40% a year by buying over the Internet.
Canadian Direct Insurance conducted a study in March. It found that, for a range of typical Alberta drivers and vehicles, auto insurance sourced on the Internet can generate typical savings of more than $500 per year per vehicle.
The company cites the following examples in its study:
– A 45-year-old Calgarian with 29 years of accident free-driving, a seven kilometer commute to work and one security device can save as much as $559 (driving a 2004 Toyota Corolla), $519 (driving a 2005 Dodge Caravan) and $536 (driving a 2006 Honda Civic).
– A 35-year-old Edmontonian with 18 years of driving experience, 10 years of accident-free driving, one comprehensive loss a year ago, one speeding ticket 10 km-h over the posted speed limit, and a 7 km commute to work, can save $463 a year (driving a 2005 Dodge Caravan) and $770 a year (driving a 2006 Honda Civic LX dr).
Canadian Direct’s chief underwriter, Karen Hopkins-Lee, notes that not all drivers or vehicles will achieve savings this large. Nonetheless, he said, “we surveyed enough insurance companies, using enough examples of different types of drivers and cars, to show that many drivers will find large savings buying their insurance via the Internet. We certainly found that anyone who buys auto insurance without checking rates on the Internet, may be wasting hundreds of dollars a year.”
Why is auto insurance over the Internet cheaper?
Canadian Direct’s chief operating officer, Colin Brown, says there are two reasons. “A direct seller cuts out the middle man and doesn’t have to pay sales commissions to brokers,” he says. “Plus, providing quotes and application processing on a Web site reduces the insurer’s processing costs. We can pass on some of that saving in the form of lower rates in our case, a 5% discount (on physical damage) on the price of buying from us over the telephone.”
Buying auto insurance via the Internet is relatively new to Alberta, the company says in a press release. “As of today, it is available from three suppliers — Canadian Direct Insurance of Edmonton, plus TD Insurance and RBC Insurance of Toronto.”