You have choices when it comes to how you buy insurance. While today’s Internet age has made many Hoosiers think that buying direct from insurance companies is the other way to go, you can actually purchase insurance in two other ways as well: By purchasing from a captive agent or by purchasing from an independent agent.
What’s the difference?
As it turns out, there are big differences between all three of these options, and there’s one option, in particular, that always wins out and provides the most benefits. Interested in learning more?
Let’s dive in!
Differences in Insurance Buying Options
Let’s go over the basics. Here’s what all of these terms mean:
When you buy insurance “direct,” you are buying it right from the insurance company itself. You don’t use an agent. Most likely, you’ll be buying this type of insurance online. Some examples of direct insurance companies include Esurance and Geico.
- Captive Agent
A captive agent is an individual who sells insurance on their own, and they probably live locally in Indianapolis, but they only represent one single insurance company. For example, they may be a captive agent for Farmers Insurance or State Farm.
- Independent Agent
Finally, independent agents are just what they sound like. They are their own independent agents and can work with any insurance company they like. They work locally like captive agents, but they are involved with more than one insurance company — representing several at one time.
Which Option Is Best?
As you’ve likely already surmised, the big winner here is the independent agent. Why? There are numerous reasons.
First, buying from an independent agent means that you’ll be working with someone who can provide you with all of the insurance you’ll need — from homeowners and auto insurance to health and life insurance. It’s essentially a one-stop-shop, and it also means that if your rates go up with one type of coverage and you end up canceling it, you don’t have to go to a new agency or agent. Your independent agent can continue to provide you with coverage by looking for new options that meet your needs.
Second, even though an independent agent will certainly be earning a commission, this doesn’t mean that you’ll be paying more than if you went with a direct insurance company. Rates are basically similar when you go with an independent agent.
Lastly, you’re simply going to get better insurance at better rates when you work with an independent agent. This is because you’ll be able to get quotes from a multitude of different agencies through your independent agent, and they work for you. They are not tied down to one company like captive agents are, so they’ll be looking for the best deals for your needs.
Already Using an Independent Agent? Tell Your Friends!
If you are already working with an independent agent to set up and maintain your insurance, be sure to share the benefits you’ve gained from this practice with your friends and family — not everyone knows about it.
If you’re not yet working with an independent agent, consider it. Insurance is a serious business, and it’s complicated. Having ample coverage with the right limits should be a serious priority for you and your family. No matter your age, background, occupation, or location, you need insurance to protect yourself and your finances. Wouldn’t it be nicer to know that someone’s working on your behalf instead of just trying to get the most money out of you?
At Binford Insurance, we’re always here to answer your insurance-related questions. Contact us today or stop in for more information.