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Car Insurance: Should You Go Agent Or Direct?
The decision to buy auto insurance isn’t always as simple as selecting the policy with the cheapest premium. Some people prefer to have local agents service their car insurance policy, while others like working directly with carriers. So what are the key differences?
Here is an overview of the two options:
Agent
Personal Relationships: As with your dentist, or physician, you will be able to form a personal relationship with your auto insurance agent. Each time you have to file a claim or make a policy change, you'll work with the same individual to address your car insurance needs. Yes, agents hang out in overly-lit rooms with silk plants on their desks -- but that doesn't mean they're not extremely helpful.
Multi-Line Policies: Carriers that agents represent tend to offer multi-line policies. This is important if you also are looking for additional insurance policies such as home and life.
Competitive Rates: If your agent is independent and not exclusive to a carrier, he or she has access to policies from multiple carriers, which can make it easier for them to offer you a competitive rate.
Myth: Agents do not have the ability to negotiate a policy rate. The only way they are able to offer you a lower rate is to reduce your coverage, or access other carrier policies (in the case that they are independent).
Direct
Convenience (over the phone): Most direct carriers staff their call centers 7 days a week for 12 hours or more a day. This means that if you have questions related to your auto insurance policy or need to file a claim, you can usually reach a live representative.
Convenience (on the web): Direct carriers usually offer online tools needed to service your policy, or submit a claim. This is a great option for people who are especially comfortable taking care of their business on the web, or do not have the time to speak over the phone.
Competitive Rates: Similar to agents, direct companies also have access to competitive rates, but for a different reason. Because they do not have to pay for personal agents, they can pass some of the savings on to the customer. Be careful though - this does not mean that your policy will always be cheaper if you work directly. Carriers each have their own pricing strategies, and some will not price your profile as competitively as an agent carrier.
Myth: Some may believe that because direct companies do not staff personal agents, they will not be able to provide coverage counseling as effectively. This is not true. Each time you call a direct carrier, you will speak with a licensed agent to service your policy. These individuals have passed the same exams as personal agents and thus can adequately address all of your needs
