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Tangled Web The Net is luring more businesses online. So why have insurance companies resisted?

By Claire Tristram

Opinions expressed by Entrepreneur contributors are their own.

These days, you can buy virtually anything online. So why is itstill hard to buy insurance over the Web?

Insurance companies are stepping gingerly, if at all, intoe-commerce waters. And while Web sites that provide quotes topotential customers are fairly common, insurance companies'offerings are spotty and actual sales over the Web are scarce.

One obstacle to selling insurance over the Web is statelegislation. According to the National Association of IndependentInsurers, 30 states have residency laws that require insurancecompanies to be licensed in the state and have agents residing inthe state in order to have policies approved for sale. Theresidency laws make selling insurance over the Web a no-winproposition for insurers because they must still support a networkof local agencies. Because of this mandate, companies often see theWeb as an added expense, one that does nothing to reduce the costof selling insurance and whose revenue potential is stillunproven.

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