In the world of digitisation, everything is available online, even insurance services. Moreover, digital insurance companies and their models show a more promising future than traditional insurance models. Opting for a digital-first option like an ACKO Policy reflects how customer preferences are shifting towards convenience and speed in today’s insurance landscape.

Hence, in this blog, we will provide you with a comparative analysis of the traditional insurance model and the digital insurance model to help you understand which suits your needs when getting auto insurance.

What Do You Mean By Digital and Traditional Insurance Models 

Digital insurance models are a modern approach to delivering insurance services to people through digital technologies such as devices, the internet, and AI. This helps to offer all the services of an insurance policy, from buying and premium paying to finally settling claims if required, through an online mode.

On the other hand, a traditional method involves face-to-face interaction, representation, and negotiation of various insurance policies with potential buyers. Once you choose your perfect insurance policy, an insurance agent manually underwrites it and gives you a paper-based document describing the whole lifecycle of your policy, including all the terms of your policy.

Comparative Differences between Traditional and Digital Insurance Models 

Below is a table providing a comparative analysis between traditional and digital insurance models for you to make an informed decision while purchasing a vehicle insurance:

Features	Traditional Insurance Model	Digital Insurance Model
Pricing	Traditional insurance has high operational costs, as they have to spend on insurance agents, paperwork and manually written documents. This cost is collected from policyholders by way of premiums.	Digital insurance is comparatively cheaper than traditional insurance models as there is no cost of manual paperwork or an insurance agent. Its online interface helps people understand the terms of the policy easily.
Time Consumption	The traditional insurance model has a complete process of plan representation and paperwork, which can take a few days and meetings to execute.	The digital insurance model is a simple process where you just have to spend a few minutes on the website or mobile app. During this time, you choose your plan as offered by your digital insurer and buy that plan then and there.
Convenience	Offline insurance services are available only during business hours. It means, if you fall into an emergency, you will have to wait till the business hours start to make a claim.	Digital platforms offer a completely instant and online claim process. This 24/7 open platform is highly appreciated by policyholders during emergencies.
Guidance	Though pricey, insurance is a long-term investment. The Proper guidance from an agent can be beneficial for you to buy your perfect insurance plan.	Digital insurance platforms have a great digital interface that clearly states the terms, coverage, and benefits of a plan. However, a meeting with an expert is better.

How Does a Digital Insurance Model Make Claims Stress-Free? 

With the introduction of digital insurance models, it is easy for auto insurance policyholders to communicate with their insurers in real time. This makes the claim process very fast and streamlined. Here are some details:

• Streamlined Application Process: The 24/7 open window on the website allows you to instantly make claims. You just have to upload some pictures as proof, and you can receive claims.
• Real-Time Claim Processing: Since this is a digital platform, there is no waiting period. Your claim process starts as soon as you file a claim application.
• Instant Payments: Top digital insurance companies like ACKO instantly verify and pay the claim money. They pay the money directly into your bank account.
• Active Communication: Digital insurance keeps reminding you of the deadlines for your premium payment. This decreases the chances of defaults in your policy, increasing your chances of receiving the full benefit of your claim.

Final Thoughts

Digital insurance models are highly beneficial and convenient compared to traditional insurance models. However, people prefer their mode of insurance based on their needs. Older people generally prefer traditional insurance models as they tend to trust paper documents more than digital documents.

However, you should remember that insurance is a long-term commitment, and losing documents can be a hassle. A simple verification process can refurbish a digital insurance document.

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