There are various ways of buying auto insurance, each with its own pros and cons. Whether you are well versed in matters auto insurance or you are a greenhorn, you can always get adequate coverage at a reasonable rate if you play your cards right. Below are some of the common methods of buying car insurance coverage.
An insurance agent is not an employee of an insurance company. Rather, the agent gets a commission for bringing business to the insurance company. A captive agent, also called a direct agent, only works with one insurance company. Therefore, if you want to deal with a captive agent, you will only buy coverage from the company they are affiliated with. A captive agent has in-depth knowledge of one insurance company, but they are unable to offer you comparisons with other insurance companies. Work with a direct agent if you know what you want, and you just want a point of purchase.
An independent insurance agent works with multiple insurance companies. An independent agent can, therefore, give you price and coverage comparisons across different insurance companies. An independent agent is a good bet if you have a basic understanding of auto insurance, but you need someone who can give you in-depth information from several carriers.
An auto insurance broker is more or less like an insurance agent in that they also get a commission for work done. The main difference between the two is that the agent primarily represents the insurance company, while the broker primarily represents the auto insurance buyer. This difference may be small, but it is significant. The broker's main interest is to get you the best possible coverage. For example, it is not a given, but highly likely, that a broker may get you better rates than an agent.
You don't have to deal with an agent or broker to buy auto insurance coverage; you can just deal with the insurance company directly. Dealing with auto insurance companies directly is known as direct wiring. In this case, you can pick up the phone and call the company, write to the company, or just visit the company in person. As you can imagine, direct writing is also suitable for those who know what they want and just want to purchase coverage in the fastest time possible. However, you might not get the best rates this way.