How any company presents itself to the market has a direct effect on its operating costs. If the company decides to maintain a brick-and-mortar presence on every Main Street, it ties up a lot of capital in property and has a big commitment to maintain staffing levels to ensure there's always enough people to open the doors and provide a good service to anyone who may walk in. But if it's possible to centralize operations and mainly deal with people by telephone and through the internet, this can cut costs and produce savings to be passed on to the customers. A halfway house is to sell your goods or services through agents. This way, you avoid the direct investment in buildings and staff, and simply pay a commission based on sales.

Translating this to insurance, a number of companies prefer the personal touch and either employ their own representatives in each area or work through local agents. Once you start meeting with human beings face-to-face, you know the final premium rate is going to be higher. Whatever you pay must cover the additional costs of the labor. The odds are buying through an agent will be the more expensive. These businesses work to represent several insurers and will juggle sales to give themselves the best return as commission. So, in most cases, the cheapest premium rates will come where you never meet human beings and only deal with automated systems.

In this, there's a slightly amusing reversal of trends. Go back five years and every time you picked up a telephone to speak to a call center, the odds favored you talking with someone in India. The outsourcing boom was at its peak and, when it came to finding cheap labor that could speak American English sufficiently well, the Indians seemed to win the contracts. This led to some unhappiness from our side of the conversation so it's good to see the latest news out of Kentucky. Here we have a direct-to-consumer company that's decided to set up a call center here. This is a partnership effort between the state government and the private company, bringing jobs to Americans talking to fellow Americans about an American product. When it's up and running, it will be servicing calls to and from sixteen states. Hopefully this will mark the start of a new trend where offshore deals will be cancelled and the work brought back to our shores.

For the record, this particular company only sells the basic liability cover. This lack of choice enables the operation to run with the smallest possible number of people. Since people are the biggest part of running costs, the car insurance rates will be among the lowest in each of the sixteen states. There's a lesson in this for us all. As a nation, we want to see as many of our people given jobs as possible. Unemployment is a drag on our economy. We also want to see cheap auto insurance. Small operations, selling direct to us consumers through the internet and telephone is one way of meeting the demand. So let's all think seriously about supporting online insurers. Most Insurance Commissioners list the companies operating on this basis. Check them out to save money.