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Auto Insurance – Who to Buy From? Insurance Brokers, Agents or Companies

There are three basic ways to purchase auto insurance:

1. From an independent insurance broker

2. From an insurance agent

3. Directly from the insurance company

All of these methods have their advantages and disadvantages, and all can be beneficial depending on the needs of the consumer

1. Insurance Broker

The insurance broker has always been a popular way to purchase insurance. They are independent in that they do not work for an individual insurance company. They basically work for you, and work at getting you the best rate. Years ago this used to be the best way to get auto insurance. You would go to an insurance broker, tell them what coverage’s you wanted and they would shop around and find you the best price. The main disadvantage to this method is that they must be compensated for their work. This could cause your insurance rate to be higher then it should be, as you have to pay for the broker’s services as well as for the actual insurance. They may also work on commissions, getting money from an insurance company every time they buy insurance with them. This brings up the question of do they really have your best interests in mind? They may advise you to purchase insurance from a company just based on the larger commission they will receive, or convince you to get better coverage in order to receive a better commission.

With the emergence of the internet I feel that brokers have become obsolete. Most of the tools they have to compare auto insurance quotes are now available to everyone. With the click of a mouse, anyone can now compare all insurance companies and find which one offers the lowest premiums. For me personally insurance brokers do not add anything of value, and they seem to offer higher rates, and then can be found online.

2. Insurance Agent

An insurance agent is like a broker, except that they work for a single insurance company. They will work at getting you the best coverage and the lowest rate but only from the company they work for.

3. Directly from the insurance company

The last way to purchase auto insurance is directly from an insurance company; wither online or over the phone. this is usually the cheapest method, as these companies set up large call centers in one location that handle calls from all over the country. This cuts their costs down dramatically. With everyone being able to use the internet, this has become the best way to get the cheapest auto insurance. Companies usually offer an additional discount when purchasing online or over the phone.

What is Best?

The three methods to purchase auto insurance have been compared and described above. In order to get the lowest auto insurance premiums, I would recommend first getting an online quote. This will compare all insurance companies in your area and give you the lowest prices. After you know which companies offer the lowest prices, you can call a local broker to see if they can match or beat the quote. It is always good to support your local business, and if a broker can match or beat the price you got online, why not buy through them? If they cannot match or beat the online price, then you have two options. If the company has an office in your city, then you can head down there and purchase insurance through the insurance agent. They should give you the same price as you found online. Option two is you can purchase insurance directly through the company either online or over the phone. Some companies do not have offices or insurance agents in all cities, so your only option to get the lowest price is to purchase over the phone or online. Remember some companies offer an additional percentage off if you purchase online, rather then through their insurance agent.

Some people may not feel comfortable buying insurance online over the phone. Their only option will be a broker or agent, and this is a fine choice, however the biggest savings usually come from purchasing insurance online or over the phone.

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