Should I Purchase Insurance Directly, Or Should I Buy Insurance Through an Independent Agent/Broker?

 Some claim, and direct writers like Geico and Progressive would surely like you to believe, that it is better and less expensive to purchase “Personal Lines” of insurance (homeowners, automobile, umbrella liability, motorcycle, etc.) through them directly instead of through an independent agent/broker.

After over 45 years in the business, we’ve seen why purchasing insurance through a direct writer is a mistake for most people.

Is it better to use an insurance agent/insurance broker rather than buy directly?

When you purchase insurance through a direct writer, you will have to do so either through their website or through their customer call center. This means that you need to know all about what the policies cover in order to make an informed decision on what type of coverage you need. Even if the direct writer’s websites have in-depth explanations on all the coverage they offer, let’s be honest: are you going to read the fine print? And even if you do, it’s likely that you will find a lot of unfamiliar terminology – will you actually understand what they are telling you, and how it relates to the types of real-world claims situations you are most likely to encounter?

For example: In the event of a car accident, do you know what your legal rights are, or what the legal ramifications are to you, based on the uninsured or underinsured coverage you purchased? Do you understand what your unique individual risks are as related to these types of policies, or what your state’s laws are and how they affect your insurance coverage? After reading the information provided on these websites, do you actually feel like you understand what they are telling you? Our team has been servicing personal lines insurance for over 45 years, and not a week goes by that we don’t learn about some new twist to the coverage offered by these policies. Is it really likely that “in just fifteen minutes” you could learn enough to make an informed decision that will directly impact your financial future in the event of a claim?

What happens when you file a claim or have a question about your policy?

Another problem with purchasing insurance through a direct writer is the knowledge and experience of the people who service these policies. When you have a question and are directed to their website or to a call center, do you know how much industry experience that operator has? Do they know anything about your history, or the specifics of your policy? Do you ever even have the opportunity to speak to the same person twice? If you ever hang up the phone more confused than when you called, you are not alone. Customer service may seem like a negligible part of your insurance policy and if you never have to use your insurance, that’s fine – but in the event that you have to file a claim, or you have a problem with your policy, you’ll want to be able to speak with someone you can trust.

Is it cheaper to buy insurance directly, or through an independent agent/insurance broker?

Most customers assume that purchasing insurance directly through writers is cheaper because there’s no broker. But the fact is that direct writers do not always have better premiums than carriers who operate through the independent agent/broker system. An independent insurance agent or insurance broker is often able to write these types of policies for premiums that compete with – or beat – premiums offered through the direct writers.

Does buying less expensive insurance save you money?

It’s easy to get the cheapest insurance you can find just so you can say you have it – but insurance is not just a legal requirement; it is there to protect you when you are vulnerable in the aftermath of a life-changing event. Do you really want to trust the expertise of a company that advertises solely based on the fact that that you can “name your price” or “save on your car insurance?”

We always say “insurance policies are just paper – until you have a claim, and then it matters what the words on the paper actually say!” If these words do not provide the coverage you need, is buying them based only on price really the best thing for you to do? Shouldn’t protecting yourself adequately based on your unique and individual risk profile be of more importance than buying the cheapest premium possible? Here’s some industry insider knowledge: as independent insurance agents, we can sell you the cheapest insurance policy out there – but instead, we are committed to helping you find a policy that not only has a competitive premium, but offers you all the coverage you need to stay protected. If you experience a life-changing event, not having proper insurance coverage can cost you far more than you would have saved on your insurance premium.

Using an insurance broker/independent insurance agent

Everyone wants to get a “good deal,” and it’s easy to be swayed by direct writers who advertise their low prices everywhere – but when purchasing something as critical as an insurance policy, it’s important to take a step back and think about who has your best interests at heart. Direct writers only have one product (their own) and they are trying to sell it to you. Independent insurance agents and insurance brokers have been around for a long time because we serve an important function: instead of trying to sell you only one available product, we offer policies from a variety of carriers so you get the best coverage at a competitive price. We are committed to taking a balanced approach that considers your needs and risks as well as the cost of your premium – while ensuring you have the coverage you need. We take the time to do the comparison-shopping for you, explain all options that are available, and make sure you understand what your coverage actually does. And when you call our agency, you will deal with the same representative every time – so when you have a question or a servicing issue, you can be sure he or she will be familiar with your policy.

So, you decide: would you rather go for the bare-bones coverage that the cheapest price and hope for the best, or would you rather purchase coverage that actually covers you when a claim occurs?