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Independent Agent vs. Direct - How to Pick Your Insurance

Story by Staff Writer, Encompassinsurance.us

April 15, 2023 4:50 PM EST - Buffalo, NY

#EncompassAgency #Insurance #AutoInsurance


insurance agent

When it comes to choosing an insurance provider, there are a lot of options out there. Two popular choices are direct companies and independent insurance agents. While both types of providers offer insurance policies, there are some key differences that you should consider before making a decision.


What Are Direct Companies?


Direct companies are insurance providers that only offer policies for their own brand. These companies often have a large national presence and may be able to offer lower rates on policies due to their large-scale operations.


A few examples of direct companies include:

  • GEICO

  • USAA

  • The General

  • State Farm

  • Liberty Mutual

Some direct companies may even have their own agent storefronts. These agents are exclusive to that provider. Ex: A State Farm agent cannot sell you a Progressive policy.


What Are Independent Insurance Agents?


Independent insurance agents are licensed professionals who work with multiple insurance providers to offer a range of insurance products to consumers. These agents act as intermediaries between consumers and insurance providers, helping to find the right policy for each individual's needs.


Independent agents utilize a variety of local, regional and national insurance providers instead of only having one brand to represent nationally.



Benefits of Independent Insurance Agents


One of the main benefits of working with an independent insurance agent is the personalized service they can offer. Because they represent many carriers, they often have a closer relationship with their clients; it is imperative to understand the customer's needs when there are many options. This can be particularly appealing for drivers who value a more personal touch when it comes to their insurance needs.


Additionally, independent agents can offer expert advice and assistance in navigating the insurance market. Because they work with multiple providers, they have a deep understanding of the different products and services available. This means that they can help consumers find the right policy for their specific needs, rather than just trying to sell them the policies their company offers.


Lastly, because independent agents work with multiple providers, they can help consumers find the right policy coverage even if they have unique insurance needs.


Drawbacks of Direct Companies

While direct companies like GEICO can potentially offer lower rates on policies, there are some potential drawbacks to working with these types of providers. One of the main concerns is the lack of personalization and advice. Direct writers operate on a large scale and often have a more hands-off approach to insurance sales, consumers may miss out on the expertise and personalized service that independent agents can offer.


Another concern is the limited policy options available from direct companies. Since these companies only offer policies for their own brand, consumers may not be able to find the right policy for their specific needs. This can be particularly concerning for drivers who have unique insurance needs or are looking for specialized coverage such as collector car enthusiasts, or homeowners who have a unique property they are looking to insure.


Why Choose an Independent Insurance Agent?

Ultimately, the choice between a direct company and an independent agent depends on your individual needs and preferences. However, there are some compelling reasons to choose an independent agent over a direct company.


If you value personalized service, expert advice, and a deeper understanding of the insurance market, an independent agent is usually the way to go. By working with an agency versus a direct writer, you can build a relationship with your agent and ensure that you receive the coverage and support you need in the event of an accident or other insurance claim.


So, whether you're a new driver or have been on the road for years, consider working with an independent insurance agent to ensure that you have the coverage you need to protect yourself and your vehicle. With their personalized service and expert advice, an independent agent can help you find the right policy for your needs and give you peace of mind on the road.


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