Car Insurance and the Benefits of Having an Agent

Cropped Hand Of Woman Showing Damaged Car to Insurance Agent
••• Srinrat Wuttichaikitcharoen / EyeEm / Getty Images

Time was, 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.

Do You 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. Everyone has a different level of need for the hand-holding an agent can provide.

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. 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. 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 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.

Benefits of Having an Agent

Why people like an agent:

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

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

Benefits of Buying Direct

For those who'd rather go direct:

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 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 cheapest price, friendliest service, and a carrier that is convenient for your lifestyle.