By the time that you have negotiated the automatic operator, the irritating hold music and the drawn-out questions about your life, obtaining a range of insurance quotes over the telephone can waste an entire day. To save time and often money, more than three million people are now using the Internet to manage their personal finances, and the insurance industry is waking up to this trend.

Malcolm Tarling, a spokesman for the Association of British Insurers, says: "The amount of business actually conducted over the Internet is negligible. Most insurance companies use their websites as an entry point, a way to advertise their services and products rather than going to the next stage and actually selling online. But there is no doubt that insurance companies will want to embrace the Internet as a new way of selling business as more and more people come online."

Despite the fact that the online insurance market is un- developed at the moment, there are websites that offer a relatively painless online service, although for limited products. Home contents, motor, and travel insurance are the most readily available. But there are some online insurance brokers that will provide a comparative quote service.

These are www.screentrade.co.uk and www.1stquote.co.uk. You fill out an online form with your details and the website will give you a list of quotes from which to choose. One click will take you on to a secure server, where you can buy the product online.

Using Screentrade, a 40- year-old housewife driving a Ford Fiesta and living in West London, would receive quotes ranging from £550.20 a year with Link Insurance to £732.65 with Zenith Insurance, so could potentially save £182.45 in one trip to a website. Her 50-year-old husband, a BMW driver, would receive quotes ranging from £1,139.10 with Zenith Insurance to £1,304.58 with Axa Insurance.

Zenith Insurance is the most expensive for one quote, and the cheapest for the other, which highlights the importance of shopping around for motor insurance. The price of the cover depends on many variables, such as age, occupation, where you live, and the extent of your no-claims bonus. So finding the right company for your particular circumstances is imperative.

Mark Ransford, product manager for Screentrade, says that the prices quoted include the company's commission but this is negotiated at the lowest rate possible with each insurance provider. It deals with 15 motor insurance companies, including CGU, AXA and Cornhill, six home contents insurers and three travel insurers.

If you want to go directly to an online insurance company, more than 70 per cent have websites, although not all have online quote services, and even fewer allow consumers to take the next step and buy their insurance online. Norwich Union offers a 10 per cent discount to customers buying car insurance online, and Eagle Star Direct gives up to 15 per cent off to its Internet customers. To find links to most large insurance companies, try www.find.co.uk, a financial information directory.

Once you have your quote, whether through an online broker or directly from an insurance company website, the method of payment tends to be similar in each case. You can either pay up-front using a credit or debit card, or you can authorise the company to set up a direct debit to take money from your bank account on a monthly basis.

Hywel Sloman, a 24- year-old business analyst, said: "Using the Internet to look for car insurance saved me huge amounts of time, and the quote I went for was amazingly cheap." He visited the websites of ten leading insurers, filled out the online forms and either received quotes immediately or they were e-mailed to him. He said the cheapest by far was Admiral, which he bought over the phone by quoting the reference number of his online inquiry. If Admiral had a facility allowing its customers to buy their products online, Mr Sloman said that he would have been happy to use it.

Buying online may save time, but does it save money? Mr Ransford, at Screentrade, says: "Eight out of ten people will be able to get the cheapest car insurance with us, and for the two that don't, we'll probably be very close." The discounts offered by Norwich Union and Eagle Star Direct mean that car insurance bought over the Internet will be cheaper than the same product bought over the telephone with those particular companies. But that still may not be the best deal for someone living in your street, with your driving history, your car and your job. The Internet is just a tool that can help in an arduous process.

Mr Sloman says: "I'm not sure whether using the Internet actually saved me money - I would probably have got the same quote by telephoning Admiral. It just meant that I didn't have to spend my whole weekend on the phone looking for car insurance." Times 4/12/1999