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Do consumers benefit when they buy insurance direct or through an independent insurance agent?

What is the difference when you purchase insurance direct to a carrier or use an independent insurance agent?

Lets' start with what is important to consumers.

In order of importance, these are the things most consumers care about when it comes to their insurance:

  1. Cost.
  2. Ease.
  3. No gaps in coverage
  4. Service
  5. Expertise
  6. Claims advocate.
  7. Same point of contact
  8. Local presence

So let’s now analyze these items and understand how each performs when insurance is bought directly or when via an independent insurance agent.

1. Cost

Contrary to popular consumer belief we found that pricing was actually better from independent insurance agent than direct insurance pricing.

The reason for this seems to be principally due to independent insurance agents have access to multiple carriers and multiple policy types while direct writers offer one carrier and sometimes one policy type.   Independent insurance agents can shop for more options therefore offering more competitive pricing.  

There are no additional fees when using an agent versus direct plus below we will discuss the leverage you get when using a reputable agent who has a good relationship with a carrier.

ease2. Ease

When you choose to buy direct you call multiple carriers to get mulitple quotes.  When you use an independent insurance agent you make one request and the independent insurance agent does the shopping for you. 

Whilst the online experience usually proved more pleasant than the phone, most independent insurance agents offered an online service, and were far, far more pro-active after they received the initial quote request from the consumer, often answering queries by personal email or call and helping to reassure customers with a human service.   Plus you can have an independent insurance agent shop all lines of insurance which may result in package discount or monoline lowest price.

3. No gaps in coverage.  Peace of mind that everything is covered

Independent insurance agents are largely far more efficient at cross checking policies than consumers, and also very good at educating their customers, explaining what types of cover were available and answering queries.

Direct processes put too much focus on the consumer to do this work himself/herself to be able to compete with the level of service provided by independent insurance agents.

The really good Direct services centered around only covering the low risk policies, and leaving any consumer with specialized needs for insurance high and dry.

4. Service

When dealing with service after the policy is issued,  independent insurance agents have a personal interest to retain your business so good service remains a top priority.  With a direct, you never speak to the same person and they do not personally know you.    With an independent insurance agent you can email them directly but you cannot do that with a direct.   If your insurance is with an independent insurance agent you have the option to call the agent or your carrier directly so you have more service options.  

5. Expertise

Not every agent can be an independent insurance agent.  To become an independent insurance agent you have to be approved by each insurance carrier you represent.   It can be a rigorous process and expertise can be one quality each carrier looks for.  Expertise is especially important if you have multiple policies, high premiums or complex insurance needs.    If you have multiple policies, the expertise can help package your coverages to maximize your value and discounts.   When you call an independent insurance agent you are speaking to someone who has passed a rigorous exam exhibiting proficiency in the subject matter.  Most independent insurance agents have additional certifications and must continue their education on current insurance changes.  Independent insurance agents also have knowledge of various policy types and coverages and can fit you with the right carrier. 

6. Claims advocate

When you use a direct writer and your claim is not being serviced to your satisfaction, you have no agent to help you.  It's only you against a very large company.  Using an independent insurance agent can help you service your claim and help you through the process.   Usually independent insurance agents have a strong relationship with the carrier and may know your adjustor so that relationship can help you get your claims serviced faster or your questions answered faster.   Plus the constant help you get throughout the claims service can give you a peace of mind that someone cares and is there to make sure you recover since this agent knows what your coverages are and already knows you personally. 

7. Same point of contact

When you use a direct writer you may never speak to the same person twice.   That is not true with an independent insurance agent.   They know you and can help plan the next steps in your risk management practices. 

8. Local presence

Consumers want the option to walk into their agent and discuss important insurance matters face to face.   With so many internet scams this is an important option to some consumers.   Also some consumers prefer to do business with a local business as it helps the local economy.   


Try an independent insurance agents today and see what you think.
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