Purchasing Car Insurance: Agents Or Direct?
All of us who drive cars in the United States must also purchase car insurance except under special circumstances
. In so doing, we typically have two choices: purchasing directly from the insurance company or working through a local, independent agent. The question is, which option is better? Unfortunately, the answer is not as simple as the question. There are pros and cons of both approaches and, in the end, it depends on your level of comfort with each.Purchasing Through an Agent :-
Up until the early 1980s, the standard method of purchasing car insurance was to visit a local agent in your area. That agent would take your information, examine your car, compare a number of policies from all the companies he represented, and then offer you what appeared to be the best choice. If you wanted to see various policies side-by-side your agent was obligated to entertain you. While this type of insurance purchase is still available, it's not the only way to do things now.
That said, purchasing car insurance through an agent is the preferred method of many older drivers - primarily because that's what they're used to and what makes them comfortable. Using an agent allows the customer to develop a personal relationship with the person representing the company rather than simply speaking to an unknown customer service agent over the phone. It also allows the customer to get multiple quotes without having to do the investigative work himself.
Typically, you pay at least slightly higher rates when you use an independent agent. That's because that agent needs to get paid. When he sells a policy, the insurance company he represents will pay him a commission in return, but that insurance company doesn't eat the commission themselves; they pass it along to you in the form of a higher premium. So while purchasing through an agent might be more appealing from a customer service standpoint, it is slightly more expensive.
Purchasing Direct from the Company :-
Very few people know that Progressive Insurance was one of the first car insurance companies to provide insurance online, direct to the customer. This is quickly becoming the preferred method by many of their direct competitors because it allows car insurance companies to do business with lower overhead. The biggest benefit is that it allows individuals to make an insurance decision, purchase a policy, and make payments all in a very short amount of time. For those who like the quickness and convenience, the direct-to-customer model is the better choice.
On the down side, you don't get the same personal service by buying direct that you do with an independent agent. For example, though finding your car insurance may be quick and easy, getting the claims process started might be slightly more difficult. You'll also have to do all of the legwork in comparing quotes on your own. In the end, you put a little more work into the process but you will get a better rate on your car insurance.
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