Car Insurance – Agent or Direct?

Does It Matter Where You Buy Car Insurance?

Who sells auto insurance?

You can buy car insurance in different ways, from a variety of sources, depending on the insurance company. Does it make a difference how or where you buy? It might. Let’s take a look.

There are essentially four ways to purchase auto insurance. They are:

  1. From a company agent (employed representative) of an insurance provider
  2. From an independent agent (not employed by an insurance company)
  3. From an online broker
  4. Directly from an insurance company via mail, telephone, or online

Some insurance companies use only one of these methods of selling to customers, others may use a combination of methods. Let’s look at the advantages and disadvantages of each.

From an insurance company agent

Some national or regional auto insurance companies employ agents who are commissioned sales and support people, and who work directly for the insurance company from small offices located around the country. Allstate, State Farm, and Farmers are examples of companies who work this way. Some people feel that there are benefits to being able to talk to a familiar voice regarding policy questions, billing concerns, renewals, and claim advice. Good agents will even call customers about new discounts or program options that offer cost savings.

From an independent agent

This type of agent is an independent business person or company, often called a broker or agency, that represents a number of different insurance companies. This is most common way that auto insurance, and other types of insurance, are sold in the United States. Many insurance providers only sell through independent agencies or insurance brokers, and don’t have exclusive agents working for them. The benefit of using an independent agency or broker is that they can do your shopping for you and find you the best insurance that meets your needs. There are thousands of local insurance brokers around the country. Check online or in your local telephone yellow pages for insurance agents.

From an online broker

With the coming of the Internet, many existing local brokers took their services online. New and large national brokers also set up shop and began to offer insurance comparison shopping and other services online.

We recommend Esurance, one of most respected auto insurance companies in America, rated A+ by A.M. Best and enjoys great customer satisfaction ratings.

Directly from insurance provider

Buying directly from an insurance company wasn’t very practical until the Internet came along. Before, you always had to go through an exclusive agent of the company, or an independent agent. Now, direct-sales companies such as GEICO, Progressive, State Farm, and others provide convenient web sites that allow customers to do research, get quotes, buy coverage, and even submit claims right from the web site. This is one of the most significant advances in the auto insurance industry in a long time.

After you choose a company

Many of the differences between car insurance companies are hidden in the details of their policies. Before you sign, make sure you read and understand these details. If you have questions or concerns, get it resolved before you sign. Later may be too late.

Also understand that, regardless of where or how you buy your insurance, claims are always handled directly by the insurance company, not the agent or broker from whom you may have purchased.

See what you can save on car insurance

If you are 50 years old or older

If you drive and are 50 years old or older, you are probably a member of AARP. If not you should be; the cost is minimal and the benefits are many, too many to mention — including access to its outstanding auto insurance program, administered by The Hartford. The program and rates are specially designed for AARP members. For example, there are multi-car discounts, safe driving discounts, disappearing deductible, accident forgiveness, home/car policy discounts, air bag discounts, hassle-free claim service, and more — including a special discount for members who take an easy online defensive driving course. To take the course costs about $15 and can be completed in about six hours. Once you complete the course, you get the additional discount.


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