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If you’re shopping for a car insurance policy, there are a few important things to consider, like the amount of coverage you need and how much you want to spend. However, you should also figure out how you want to purchase the policy—through the insurance company, a captive agent, an independent agent, or an insurance broker.
There are several different ways to buy car insurance. Perhaps the easiest and quickest way is to purchase auto insurance directly from the insurance company that underwrites the policy. Many of the largest car insurance companies allow customers to get a quote and buy a policy online, without ever speaking with a customer service agent.
If you prefer to work with an insurance expert, you can purchase car insurance through a captive agent, independent agent, or an insurance broker. Working with an agent or broker has benefits, especially if you:
However, there are also some downsides of working with an agent or broker. Another option is to use a quote comparison website, like Rate Retriever, to get matched with rates from multiple insurers using a single questionnaire. Take our short quiz to see how much you can expect to pay for car insurance.
When we talk about a carrier, we mean the insurance company who sells the policy and will pay out your claims when needed. The main benefit of purchasing car insurance through a carrier is simplicity. If you choose a major company, like State Farm or Geico, you can visit the website and get a quote for the type and amount of coverage you want. Then, you can checkout online and download all of your insurance documents and ID cards.
Buying car insurance directly from the carrier is also a convenient option if you need to purchase insurance quickly. For example, if you buy a new vehicle, you can get a car insurance policy online or on your phone while you’re waiting at the dealership. For most people, this process only takes a few minutes.
One of the downsides of buying car insurance from a carrier is that you don’t get the opportunity to ask questions or make sure the amount of coverage you’re choosing is sufficient, unless you talk to one of their insurance agents. When you purchase online, you have to make those decisions on your own, without the help of an insurance expert.
Working with an insurance agent can be a great option for people who want help choosing the best car insurance for their needs. Car insurance agents are an excellent resource if you’re not sure how much coverage you need, what type of coverage you need, or if you have questions about what your policy covers. Depending on the type of agent you work with, they can also help you find the best deal.
Benefits of working with an insurance agent include:
When choosing an agent to work with, it’s important to note that not all insurance agents are the same, and the services they are able to provide you may vary. Therefore, it’s sometimes more appropriate to work with one kind of agent over another.
There are two main types of insurance agents: captive agents and independent agents. We’ll cover both in this section so that you know what kind of insurance agent you’re looking for.
A captive agent sells insurance for a single insurance company, like Nationwide or Farmers. These agents have deep expertise and knowledge of that insurance company’s policies and product offerings.
How they make money: Captive agents are typically paid a salary by the insurance company they work for and may also receive commission on the policies they sell, plus other benefits.
Working with a captive agent can be a good idea if you’ve already decided on a specific insurance company but you need help picking the right policy. For example, a captive agent can explain the different endorsements available and recommend which ones would be beneficial for your unique situation. They can also let you know what discounts you may qualify for.
If your main priority is to purchase insurance quickly, buying insurance through a captive agent might not be the best option. Usually, you will need to speak with the captive agent on the phone or meet with them in-person at a local office. There could be some back and forth communication over a few days or weeks before you’re ready to finalize your policy.
Another downside to captive agents is that they can’t help you compare quotes from other companies. So, if your goal is to find the cheapest car insurance possible, and you aren’t tied to a specific company, an independent agent is a better option.
An independent agent contracts with multiple insurance companies to sell their policies. It’s common for independent agents to specialize in a single coverage area, such as property and casualty insurance, life insurance, or health insurance. Additionally, some insurance companies exclusively sell insurance policies through independent agents.
How they make money: Typically, independent agents get paid through commissions from the insurer when they sell a new policy.
When you work with an independent agent, you get access to insurance policies from all the different companies they represent. For instance, if you’re shopping for car insurance and you work with an agent that represents Liberty Mutual, Farmers, National General, and Erie, the agent can help you find the best policy out of all those companies (not just one).
Because they have access to multiple carriers, an independent agent can also help you get the best car insurance at the most affordable price. Instead of spending time comparing quotes yourself, an independent agent can do that work for you.
One of the limitations of an independent agent is that they aren’t necessarily an expert in all of the insurance policies from all the companies they sell. If you have very specific coverage needs, a captive agent with in-depth experience of one company and its products may be able to serve you better. Additionally, independent agents will not necessarily represent all the insurance companies in your area, so if you want to compare a wider set of companies, you may be better off getting quotes from many companies in your area first.
Unlike an insurance agent, an insurance broker works for the consumer, not the insurance company. Brokers can help shoppers find the best car insurance for their needs from a wide variety of insurance companies. However, brokers don’t sell insurance policies. Once the client finds a policy, the client must work with an agent to complete the transaction.
How they make money: There are a few ways that insurance brokers make money. Most brokers make a commission from the insurance company when they sell one of their policies. Brokers may also charge clients a fee, which is usually a percentage of the commission the broker makes on the sale.
Using an insurance broker can help you find the best car insurance policy at the best price. Additionally, brokers tend to provide excellent customer service because they work on behalf of the client, not the insurance company. And because brokers aren’t required to meet quotas, you may find that a broker is less pushy than an insurance agent might be.
However, insurance brokers are not authorized to sell policies. Once you find the policy you want, you will need to work with someone else (usually an agent) to complete the purchase process. Also, be aware that some brokers charge a fee for their services. If you’re thinking about using a broker, make sure to ask about their fees upfront.
It really depends on your goals. If speed is most important to you, purchasing your policy directly from the carrier may be your best bet. If coverage is most important to you, working with an agent may be the right option since they will be able to recommend coverages unique to your needs. If price is the most important to you, working with a broker or independent agent may be best.
However, depending on the company you want to work with, your options will be different. Most national carriers give you the option to purchase directly online or by calling to speak to an agent. Some smaller, local insurance companies only sell policies through independent agents.
We recommend you start your insurance search by doing some research on your own. Rate Retriever makes this easy: you answer a few questions about yourself and we’ll search all the companies in your area so you know how much you can expect to pay at each.
From there, the choice is yours. Just remember that some companies may require you to go through an agent.
It’s always a good idea to ask an agent if you can get discounted car insurance. However, you will probably need to qualify for one of the discounts offered in order to save money. Some insurance companies don’t advertise all their discounts online, and some discounts may only be available in certain states, so it’s worth speaking to an agent about the ways you could save.
Some car insurance companies offer discounts for first responders, but it’s not very common. Liberty Mutual, California Casualty, and COUNTRY Financial are a few of the insurers that offer discounts for police officers, firefighters, EMTs, and other first responders.
Students can get discounts on car insurance, but there are some eligibility requirements. Most insurance companies offer a discount to single, full-time high school and college students who maintain a ‘B’ GPA average or better. Students may also qualify for savings if they earn a certain score on standardized tests, like the SAT, ACT, or PSAT.
There are some car insurance providers that offer discounts to senior drivers, but not many. You may find car insurance companies that offer a discount to senior drivers who complete an approved defensive driving course. Seniors may also be able to get a discount if their insurance company offers an affinity discount to members of the AARP or similar organizations.
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