You can save money by purchasing cheap online insurance. However, the questions that bother you are - will you really save money by doing this, or lose money when the prices increase, or will these cheap insurance policies make you lose money for not consulting a broker. It is essential for insurance agents to inform their clients to consult them when they are planning to buy any policy.

Cheap online insurance might sound convenient and fashionable, but there is always a risk hidden behind that cheap insurance quote. It might turn out to be risky if you do not take the advice of your agent.

It is possible that by avoiding agents you can save some money. That is the main reason for online insurance companies to provide cheaper quotations for their insurance, along with great service. They also think that by making deals directly with the headquarters, they will cut down the prices automatically as there is no dealing with any outside agents.

Nevertheless, many of these insurance agencies are offering big offices to agents whom they are employing. There are often some loopholes that can be found in these cheaper insurance policies.

Peter Hoods story is typical of many people that have fallen foul of the risks.

"I bought homeowners insurance for 35 years on my principal home. Additionally, I also own a big cottage house, with 25 years of coverage. Together, it make 60 years of premiums. Making a deal with a top-notch insurance company makes me feel safer.

After that, the water pipe of my cottage house burst and water filled in everywhere including my attic. All the rooms in the upper floor and areas in the lower floor including roof, attic were damaged. It was a $50,000 loss.

On trivial grounds, the insurance company denied the claims. Over a year later, I am still left with an unpaid bill. I bought this cheap insurance and did not received any benefits from doing that."

The lesson is, however you buy your insurance, make sure you read the small print. Don't get caught out!