Direct Auto Insurance

When shopping around for auto insurance, this question often pops up: Should I buy from directly from an auto insurance company, from an insurance agent or from an independent broker? Let's analyze the pros and cons of the three.

Picture of different types of cars

Direct auto insurance sellers

Direct auto insurance providers are the main policy issuers who sell their services, as the name says, directly to you, as the end user, without the means of an agent or broker. Since there are no third parties involved, costs might be the lowest.

However, this comes with one major disadvantage: your choices are limited. You can only buy what that company is selling, so if you want a package that is not in their portfolio you will just have to stick with what they are selling. It's like when you want to paint your apartment and visit a store that sells very cheap paint, but they only have white paint and a couple of shades of gray.

Insurance agents

Insurance agents are only authorized to sell policies from the companies they represent. They have a contract with one insurance carrier and are only allowed to sell their products. It's much like the case where you buy a McDonald's franchise -- you may not sell Burger King hamburgers.

A good reason why you might want to sign a contract through an insurance agent is the dedicated support. Your agent is the only contact person you need -- he is there to answer all your insurance-related questions -- and will take care of the paperwork on your behalf. Otherwise they are much like buying from direct car insurance sellers.

Independent brokers

As you might have guessed, buying insurance from independent brokers can be the correct choice. These brokers work with a wide range of insurance companies and can recommend a tailor-fit solution for your needs. They know what each company has to offer and can recommend the right policy.

Brokers can usually assist you with filing the paperwork, as well as providing administrative follow-up like changes in your income level, marital status or address. They can also monitor the insurance market and notify you when a company can offer you a better deal. All these services, however, come at a cost -- the brokers have to make a living, so they charge a fee for their services.

A fourth option -- the Internet

As you can see, buying insurance directly from a company is the cheapest solution, but you have to do the market analysis on your own. Contracting an independent broker costs money. A better option is to do the broker's work by yourself, with the help of an insurance calculator. Such tools pull quotes from a wide range of providers and present you with the best pick, and this is all for free. With such a tool, you will be buying the policy directly from the issuer, so no third parties are involved. Our site comes with such comparison software, why don't you give it a shot?