Buying Auto Insurance

An insurance agent is a person who makes his or her living connecting motorists with auto insurance companies. Sometimes called an insurance broker, insurance agents act as a go-between and receive a commission from auto insurance companies when they set up a policy for individual drivers or companies. Many well known auto insurance companies, such as Allstate and State Farm, are actually insurance agencies that deal with companies, rather than the insurers themselves. This produces part of the confusion for people buying insurance, because often there is no specific differentiation between auto insurance companies and agencies.

Insurance agents can be either independent or exclusive. Independent insurance agents shop around to a number of different insurance companies in order to find the best deals for their clients, while exclusive insurance agents have established relationships with a few insurance companies, which allows them to get better deals than the average client. Both independent and exclusive insurance agents have advantages, and neither is really the better of the two.

Buying insurance directly means just what it seems to mean: you, as a motorist, deal directly with an insurance company to purchase, maintain, and administer your auto insurance policy. Companies that are direct auto insurance providers include names such as Progressive, Liberty Mutual, MetLife Auto, and The Hartford. Direct auto insurance policies eliminate the go-between person, which is neither good nor bad, depending on what you need from an insurance policy.

As with insurance agents, there are different types of auto insurance companies. Typically, there are few extremely local insurance companies (those that cover only a city and its suburbs, or a county), as this would mean a much smaller customer base. Most insurance companies are either statewide or nationwide. Part of the reason for this is that it’s often just as easy for the insurance company to insure motorists all across the state, because the motor vehicle laws are consistent. Multi-state, or national, auto insurance companies have regional offices in many different locations in order to better meet the various state driving and insurance laws.

Both insurance agents and buying direct have advantages. The benefits of buying an auto insurance policy through an insurance agent include such things as personalized service, convenience, and competitive rates. Of course, the benefits will vary between individual insurance agents and agencies – some may offer better personalized service, while others might have better rates or greater convenience for motorists.

Personalized service may be the biggest reason that drivers choose to go through an insurance agent for their auto insurance. With an insurance agent or agency, you are able to meet with your agent face-to-face and discuss the best auto insurance policy for you and your needs as a motorist. You will also have lower hold times when calling an insurance agent, because the agency only deals with their clients instead of all policy holders at a given insurance company. Finally, insurance agents and agencies can help you understand how your coverage works and what you can expect from your insurance company in terms of claims response and accident assistance.

In some cases, an insurance agent or agency will be able to get you a lower rate, especially if you have a good driving record. This often depends on whether the agent is independent or exclusive as well. Another benefit that may be included in this category is the ability to switch insurance carriers without penalty or a lapse in coverage if you are dissatisfied with your auto insurance policy, and without going through the hassle of contacting another insurance company yourself.

The ability to switch insurance carriers is also a convenient benefit of insurance agents and agencies. In terms of convenience, you may be able to work with your state’s Department of Motor Vehicles faster with an insurance agent, since you will not have to wait for your insurance documentation to be mailed or faxed to you – the insurance agent will provide the necessary paperwork on the day you purchase your new policy. Some insurance agencies have weekend hours, which is another added convenience that may allow you to pay your premiums at the office location.

There are also many benefits to buying insurance directly from an insurance company. Many of them are in the same categories as the benefits of going through an insurance agent or agency – you may be able to save money, enjoy some conveniences, and receive great service.

Chances are, you will not meet with your insurer face-to-face if you buy auto insurance directly from an insurance company. However, there are quite a few conveniences offered by going directly through the company. Most auto insurance companies, especially the nationwide carriers, offer 24-hour telephone or online assistance for their policy holders (and in some cases, both phone and Internet assistance is available). This can save you a lot of time and hassle if you need to take care of an insurance claim or a policy change outside normal business hours.

With buying insurance direct, the biggest reason many people choose this route is to save money. There are often several fees involved with insurance agents and agencies, such as broker’s fees, endorsement fees, and renewal fees. Of course, a direct auto insurance policy eliminates these fees. If you have a good driving record, you can still get great insurance rates through a direct policy without involving an insurance agent.

Direct customer service is actually a benefit of buying insurance right from an insurance company. If you decide to make changes to your auto insurance policy, you can simply call the company or access your account online to make the changes without having to deal with a third party or go-between. The insurance company will also provide direct claims assistance, which is often available 24 hours a day, 7 days a week – so you can report a claim as soon as an accident occurs, and get things straightened out faster.

The most important thing to consider when you are choosing between an insurance agent and buying direct auto insurance is to decide which method will work best for you, your lifestyle, and your driving needs. There are many different factors you should take into account when you are considering whether to get an insurance agent or buy directly from an auto insurance company.

Cost, of course, is a big factor. Depending on your driving record, you will probably see that there is not much difference between the two methods. In most cases, an insurance policy with broker’s fees included from an auto insurance agency with a solid reputation will cost about the same as a direct policy from an insurance company. If your driving record is not quite squeaky clean, there may be a difference. It is possible to get a better deal on an insurance policy through an agent if you have a less-than-perfect driving record. Again, though, that is going to vary between auto insurance companies.

You should also consider convenience when you are deciding between an agent and a direct policy. If you find it difficult to get things done during regular business hours (for example, if you have turned to online banking because you never seem to be able to get to the bank when it’s open), then you may be better off with a direct policy from an auto insurance company that offers 24/7 phone and Internet support. However, there are also exceptions, and you may be able to find an insurance agent with evening and weekend hours if you would prefer to go through an agent. Also, an insurance agent or agency is often able to combine other policies, such as life insurance and home insurance, for additional discounts.

Customer service can also be a factor. If you do not understand much about auto insurance, and you would rather leave your policies in the hands of an expert, you may want to consider going through an insurance agent who will be able to determine what’s best for you as a driver. If you have a decent idea of how auto insurance policies work, and you don’t mind handling the documentation and policy records yourself, a direct policy can provide you with greater convenience and more money saved.

It is important to make sure any insurance agent or agency you deal with is reputable and honest. If you want to deal with a local branch of a national agency, be sure that the branch office is definitely affiliated with the national company before signing on with an insurance agent. One good way to check the reputation of an insurance agent is to find other people who are clients of that agent, and ask them if they are satisfied with their auto insurance services. Most insurance agents will be happy to put you in touch with some of their current clients.

If you’re buying insurance directly from an insurance company, again, you will generally be safe with most established national companies. It is a good idea to compare rates between insurance companies before you decide which one you would like to purchase a policy through. If you have special needs as a driver, such as a less-than-perfect driving record, multiple cars, or special licenses, try to look for a company that specializes in the areas you need. This will often get you a better rate for your insurance policy.

Perhaps the easiest and most convenient method of shopping for insurance is online. There are many companies and websites that offer side-by-side comparison quotes for auto insurance from a number of different companies. Though you will not know the exact price you’ll end up paying for your policy, you will have a general idea of what to expect when you sign up for a policy. An independent insurance agent can also go through the comparison process for you – either over the phone or in person – to find the best rates and the best policy for your driving needs.

Make sure that you do not settle for the first auto insurance quote that seems within your financial range. Often, you can find better deals with a bit of digging around and investigating different methods of auto insurance policies. Being familiar with your state’s insurance laws is a good way to help yourself get the best rates with the coverage you need.

In general, choosing between an insurance agent and buying insurance direct comes down to what will work for you as a motorist. Neither method is better than the other. You will discover that each has advantages and disadvantages for your particular situation. The most important thing you should do when you’re selecting auto insurance coverage is to be informed and know what you need from your auto insurance carrier. Diligence is important in shopping for an auto insurance policy. Getting the best deal is entirely up to you!