Do I Need an Insurance Agent?

Different Sources of Car Insurance

Mid adult couple talking with insurance agent in office, smiling
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It used to be, the only way to purchase car insurance was through an agent. Now with the digital age in full swing another option is available. Purchasing car insurance directly through the internet is becoming more and more popular, which raises the question do I need an insurance agent?

Start by knowing all the methods to purchase car insurance. Then weigh the benefits of each one. Finally, go with your gut feeling.

Car insurance is very important and you want to make sure the coverage is made clear at the time of purchase.

Three Sources of Car Insurance

  1. Captive Agent: A captive agent is an agent that sells one primary insurance carrier. These agents are not sole proprietors. They work directly for the insurance company. A captive agent's responsibility is to place business with one designated carrier. Some of the largest insurance carriers such as State Farm, Allstate, and Nationwide employ captive agents. Twenty-four hour customer service centers are available for most carriers but the agent handles most of the client's needs directly.
  2. Independent AgentAn independent agent is an agent that sells insurance through multiple carriers. While an independent agent may sell primarily for one carrier, they still have the ability to place business with other carriers if it benefits the client. Independent agents work directly for the client verse the insurance carrier, allowing a broader search of carriers within one agency. Some insurance carriers which use independent agents include Auto Owners, Citizens, and Hastings Mutual. Twenty-four-hour customer service centers are available for most carriers but the agent handles most of the client's needs directly.
  1. Direct OnlineBuying direct means no agent is involved in the insurance process. The client does most of the work by imputing all the pertinent information online. Some large online insurance carriers include Geico, Progressive, and Esurance.

Benefits of Having an Agent

  • Personalized Service

    Personalized service is something a lot of people still look for in the insurance industry. With so many automated services enforce, it's a breath of fresh air to see a smiling face, or actually get a person on the phone verse trying to finagle your way through voice prompts. Lots of questions, maintenance, and claims surround car insurance. Having an agent is nice because you can always speak with the same person which builds a strong relationship verse multiple customer representatives.

  • Knowing Your Area

    Having a local agent that knows your area is also a benefit. An agent can relate to you and where you live. If you have a claim, an insurance agent will know the good body shops and glass companies to recommend in your area.

  • Cash Payments

    Cash is becoming scarce, but for the people who don't want to give it up, most agencies still accept cash payments.

  • Multi-policy Discount

    A big perk for having all your insurance with an agent is the multi-policy discount. Most insurance carriers offering products through an agent include car, home, and financial services which when combined receive a multi-policy discount. A lot of the online companies are not yet offering home or financial products limiting your potential discounts.

Benefits of Buying Direct

  • Fast Online Convenience

    Buying car insurance direct is super fast and convenient. Any time day or night, you can go online and run your own quote. It's definitely time effective since with an agent you have to give all your personal information and usually wait for a call back. If you are in a hurry, directly purchasing your insurance online is a great way to go.

  • Potential Savings

    It is possible to get a lower rate when purchasing car insurance direct. Since direct carriers do not pay an agent commissions, theoretically the savings is passed on to the customer. One insurance carrier is never single handedly the best or cheapest for everyone. You will still have to do your research on which carrier is the cheapest for your exact situation.

    Insurance agents are no longer mandatory with today's technology. It is more of a personal preference in how you like to do business whether you need an agent or not. If you are comfortable with insurance terminology and fully understand your policy, foregoing an agent is an option. The smartest option is to shop around for the cheapest price, friendliest service, and a carrier that is convenient for your lifestyle.