Do you know what a direct writer is? Do you know the difference between an independent agent and a captive agent? Do you know which will give you a better deal on your policies?
Questions like these make purchasing insurance of any kind a challenge. In this article, we’ll answer these questions, and we’ll also discuss the pros and cons of the top three ways most people buy insurance.
How Do Most People Buy Insurance?
The public essentially has three options when it comes to buying any type of insurance:
- First, you can purchase insurance from a direct writer.A direct writer is an insurance company who doesn’t employ agents to sell their plans or “write” their insurance. Instead, consumers like you go direct to them to purchase their policies. This can be done over the phone or, more likely these days, online.
- Next, consumers can go with a captive agent. As you may have gathered from the name, a captive agent is an insurance agent who is “captive” to one single insurance provider. In other words, they can only offer insurance from one provider (for example, American Family, Farmers, or State Farm). These agents earn a commission for assisting you, the consumer.
- Finally, consumers can go with a different type of insurance agent — an independent agent. Similar to captive agents, independent agents earn a commission by selling insurance from a central provider. But there’s one critical difference — where captive agents work for just one insurance provider, independent agents are on their own, selling insurance policies from a number of different providers.
Pros and Cons: Which Buying Option Is Best?
Direct Buy Pros and Cons: Buying from a direct writer comes with several positive benefits, including the fact that you can buy your insurance on your own time, from the comfort of your own home. In many cases, you can get great deals with direct writers as well.
The unfortunate feature is that it’s very likely you’ll choose a plan that’s subpar. Insurance is extremely confusing, and without an advocate to help you choose a plan, you may end up in trouble when it comes time to make a claim. There will be no one on your side, and if you haven’t purchased the right plan, the only person you can blame is yourself — not a good situation. You’ll also have to do all the shopping around by yourself.
Agent Pros and Cons: Working with an agent is a better way to buy insurance, but which type?
Nearly all the time, your best option is working with an independent agent.
Why? Independent agents offer you choice, flexibility, and commitment. These agents don’t have to be dedicated to just one insurance provider as captive agents do. Instead, they’re free to offer you an array of eclectic insurance plans to meet your needs. When rates go up, you can cancel and still stay with the independent agent you’ve always worked with.
What’s better, independent agents are local members of your community and are committed to finding you a better value than you can get with a direct writer. You can even get all of your insurance with one agency.
Are you already working with an independent agent? Be sure to share the exceptional value of working with an independent agent with your friends. Not everyone knows about the advantages of buying insurance this way!
Still shopping for a new plan? Mid-Rivers Insurance has you covered! Simply stop in or give us a call today to speak with a friendly and knowledgeable agent about your insurance needs.