Car Insurance and the Benefits of Having an Agent

Cropped Hand Of Woman Showing Damaged Car to Insurance Agent
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In the past, the only way to purchase car insurance was through an agent. However, purchasing car insurance online is becoming more popular, which raises the question of whether you even need an insurance agent. Learn how to decide whether you need an insurance agent, and what factors to consider.

Key Takeaways

  • Only you can decide whether the benefit of having an insurance agent you can directly call, email, or visit with in-person at their office is worth more than purchasing a policy online.
  • Three sources of buying car insurance are captive agents, independent agents, and buying direct online with no agent.
  • Benefits of an insurance agent include personalized service, knowing your area, and knowing discounts.

Do You Need an Insurance Agent?

Only you can decide whether the benefit of having an insurance agent you can directly call, email, or visit with in-person at their office is worth more than purchasing a policy online. Purchasing insurance is important to your financial well-being and understanding the coverage at time of purchase and as your needs change is a crucial part of ensuring you have limited your risk exposure.

Three Sources of Car Insurance

Here is a look at sources of car insurance and the role agents play in each:

Captive Agent

A captive agent is an agent who sells one primary insurance carrier. 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. Most carriers have 24-hour customer service centers, but captive agents handle most of the client's needs directly.

Independent Agent

An independent agent sells insurance through multiple carriers. While an independent agent may sell primarily for one carrier, they still can place business with other carriers if it benefits the client. Independent agents work directly with the client vs. the insurance carrier, allowing a broader search of carriers within one agency. Some insurance carriers that use independent agents are Auto-Owners, Citizens, and Hastings Mutual. Again, 24-hour customer service centers are available for most carriers, but the agent handles most of the client's needs directly.


Buying direct online means that no agent is involved in the insurance process. The client does most of the work by entering all the pertinent information online and engaging from there. Some large online insurance carriers include Geico, Progressive, and Esurance.

Having an Agent vs. Buying Direct: The Benefits

Personalized Service

Personalized service is something a lot of people still look for in the insurance industry. With so many automated services in force, it's a breath of fresh air to see a smiling face or get a person on the phone instead of 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 to the same person, which builds a strong relationship as compared to a different customer representative each time you call.

Knowing Your Area

Having a local agent who 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

One 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 online companies are not yet offering home or financial products, limiting your potential discounts.

Fast Online Convenience

Buying car insurance direct is super fast and convenient. Anytime, day or night, you can go online and run your quote. It's time-efficient, since with an agent you have to give all of your personal information and usually wait for a callback. 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 commission, theoretically the savings are 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 in today's technology-driven world. Whether you need an agent or not, is driven more by a personal preference for how you like to do business. If you are comfortable with insurance terminology and fully understand your policy, forgoing an agent is an option. The smartest option is to shop around for the best coverage at the lowest price, friendly and responsive service, and a carrier that suits your personal preferences.