Buying insurance direct vs. through an agent: Pros and cons


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Written by
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Reviewed by
Farmers CSR for 4 Years
UPDATED: 2021-06-16T19:17:17.727Z
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There are a few ways you can buy insurance. You can go through an agent or buy directly from the company. Which way is better? It largely depends on your needs and wants in an insurance buying experience, but there are positive and negative aspects to both.

Here are the pros and cons of buying insurance through an agent and buying direct to help you decide which option is best for you.

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Should I buy insurance through an agent?

Buying insurance through an agent is like having your own personal assistant to help you buy insurance. There are two types of insurance agents: captive agents and independent agents. A captive agent is an agent that only sells for one insurance company while an independent insurance agent usually works for an agency that sells insurance products for more than one company.

At the end of the day, you want to make sure that that you have the most valuable coverage at the most affordable price. Buying your insurance policy with a trusted, experienced insurance agent can help guide you in the right direction. Make sure you understand your policy service options before making a final decision.

There are pros and cons to buying insurance through an agent, which is important to consider before deciding how to purchase your insurance.

Pros to buying insurance through an agent

An insurance agent can help you through the whole insurance buying process and beyond. Some of the pros of buying insurance through an agent are:

  • An insurance agent can help you buy an insurance policy and make sure you're purchasing the right amount of coverage for your needs.
  • An agent can help you understand the different insurance terms and coverages.
  • An independent agent can help you compare prices from multiple insurance companies to help you find the best deal. They can help ensure that you are getting the best, most affordable rate.
  • Captive agents are very experienced and knowledgable about the company they represent.
  • Agents are typically local to your area and experienced in the needs of your area.
  • An agent can help you at any time throughout your policy if you have any issues, changes, or need to file a claim.

Whether you use a captive agent or an independent agent, your agent can help you evaluate your insurance needs. While independent agents sell for more than one company, captive agents represent one company. Some companies that use captive agents include State Farm, Allstate, Farmers and American Family.

Cons to buying insurance through an agent

Buying insurance through an agent is a great way to get assistance finding a policy rather than doing it by yourself, but it may not be the quickest way to buy insurance. There are a few cons you should be aware of if you choose to buy insurance through an agent

  • You need to depend on your agent for a lot so some things may take longer to process than if you were to do it on your own.
  • Independent agents only work for a handful of companies and captive agents work for one company. You could miss out on opportunities from companies your agent doesn't sell for.
  • Agents earn commission on your policy and they may have higher incentives if they sell you a policy with a certain company.

It's important to know that you won't be able to get an insurance quote for all companies if you choose to use an agent. With an agent, you'll be limited to companies that they work with.

If you want a quote from a different company that your agent doesn't sell for, you either need to buy directly from the company or you need to find a different agent that sells insurance for that company. While agents only represent select companies, some companies only sell through agents, so if you want a policy from one of those companies, buying through an agent will be your only option.

Since captive agents only sell for one specific company, they are unable to recommend any other company other than the one they sell for and cannot help you get quotes from others. They also can't help you switch companies. If you want to switch, you'll need to get a new agent or go direct.

Or, should you buy insurance direct?

If you find that you don't need help from an agent, you can buy insurance directly from the company. This is often the fastest way to get coverage. It avoids having to go through an agent and wait for responses and quotes to come back. Instead, you can get the quotes yourself, compare them and choose the best one on your own.

Just like buying insurance through an agent, there are also pros and cons to buying insurance directly from the company.

Pros to buying insurance directly from the company

Buying insurance directly from the company has its benefits. Some of the pros to buying insurance direct are:

  • Buying insurance directly from the company is a fast and easy way to get coverage.
  • Going direct avoids the back and forth that you have if you go through an agent.
  • It's convenient to buy insurance directly from the company and most of the time it can be done online.
  • You may pay less for a policy if you buy direct rather than using an agent.
  • You have more control over which companies you get a quote from.

What it really comes down to is that buying insurance directly from the company can be faster, easier, and more convenient than going through an agent, as long as you have an understanding of insurance and what your needs are.

When you buy insurance directly from the company, you take out the middleman (the agent) so you can get coverage quicker. With many companies, you can go through the process to get an insurance quote and purchase a policy online. Usually, the larger and well-known insurance companies allow you to get quotes online.

There are even some smaller companies that have online quoting capabilities as well. Lemonade is a highly rated renters and homeowners insurance company that allows just about everything you’d need to do for insurance to be done in a mobile app or online.

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You may pay less for an insurance policy if you buy direct rather than through an agent. This is because the insurance company didn't have to pay an agent commission on your policy since you bought it on your own. The savings that the insurance company gained from that could be passed down to you in the form of a lower premium, but it's not always cheaper to go direct.

Cons to buying insurance directly from the company

Buying direct may be the quickest way to get insurance, but you may be sacrificing some valuable assistance if you don't use an agent. Some of the cons to buying insurance directly from an insurance company are:

  • If you buy direct, you won't have the personalized experience you have if you go through an agent.
  • If you need help while going through the quoting process, the buying process, or if you need help with your policy once you have it, you may need to rely on the company's customer service call center.
  • You could miss out on companies that only sell their products through agents.
  • You could end up with coverage that’s not right for you or insufficient coverage.

If you buy insurance directly from the company rather than going through an agent, you are missing out on the personalized experience you get with an agent. An agent evaluates your insurance needs and can help you find a company that's best for you. Plus, if you don't have an agent, you don't have a person you can direct all your insurance questions to or someone specific that can help you with any policy changes.

Some insurance companies only sell their insurance products through agents. While typically the larger companies (Geico, Progressive, etc.) allow you to get quotes online, you may miss out on the smaller more local companies that don't allow you to buy insurance directly.

Probably the most important con to buying insurance direct is that you may end up with either too much or too little coverage. When buying it directly on your own, you're required to evaluate your needs for yourself, rather than having an experienced agent doing that for you. For instance, you may not properly assess whether you need flood insurance. There could also be some insurance coverage terms that you don't understand. This could leave you paying for too much insurance coverage or for not having enough coverage.

What's the difference between buying insurance online vs through an agent?

The best way for you to buy insurance largely depends on your preference and needs. Using an agent to buy insurance is best for people who need help navigating the insurance buying process. It's best for those buying insurance for the first time or who have recently gone through a big life change, such as getting married, buying a house, or adding a teen driver to their car insurance policy. If insurance confuses you or stresses you out, an agent can help you through the process.

If you're confident in your insurance needs, know what you want from a company, and know what to look out for, buying directly from the company can save you time.

Is it cheaper to buy insurance online or through an agent?

It's not necessarily cheaper to buy insurance directly from the company online or through an agent.

An agent can help you get insurance quotes and shop around for the best price for you. Insurance agents are experienced in the insurance industry and can often find you a good deal. They can also look into discounts and find all the discounts you qualify for. To find an agent or agency near you, you can visit Clearsurance’s agent ratings page to see which agents consumers say are reputable in your area.

When buying insurance directly, you have the ability to get quotes from multiple different insurance companies that you choose, not just the companies your agent works with. If you are comfortable with buying directly, you may be able to find a cheaper policy if you get multiple quotes.

When shopping to buy insurance directly, be sure to visit Clearsurance’s rankings pages to get quotes from the companies that consumers say are the best. You can visit our:

Should I use an online insurance marketplace to buy insurance?

Another option to consider when shopping for insurance is to use an online insurance marketplace. Marketplaces are online third-party sellers of insurance. You enter your personal information necessary to receive an insurance quote and a marketplace can give you multiple insurance quotes at once. This makes shopping online much quicker because you don't need to enter your personal information multiple times for each company you want a quote from.

However, some consumers complain in online seller reviews that marketplaces sold their data to multiple companies and/or agents, and as a result, they were bombarded with calls of people trying to sell them insurance policies. Before you buy insurance from an online insurance marketplace, just make sure to research their policies to see how your data may be used.

It is important to do your research before deciding what insurance policy to choose, whether it is life insurance, business insurance, or a homeowners policy. A good step to help you make the right decision might include a conversation with your local insurance agent. They can guide you in the right direction of what policy is best for you and your family. However, buying directly from the insurance company is always an option too. No matter which route you choose, conduct your research so you can ensure that you and your family are protected.

You can also read: Buying auto insurance online? What you need to know before you do!

Visit Clearsurance’s online insurance marketplace rankings page to see which ones consumers say are the best.

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