Should You Use A Local Independent Agent for Your Auto Insurance?

When you decide to buy a car you wouldn’t purchase the first one you see. What if one day the automobile industry decided to make only one type of car, one make and one model? You wouldn’t have a choice.

The same holds true for your car insurance. You need insurance to drive a car, to purchase a house, to protect your family’s financial future, and to run a small business. But if there was only one insurance company that offered only one type of insurance, car insurance, home insurance or business owner policy, you wouldn’t have a choice. The only solution would be going to that one company. Fortunately, that is not the case and you do have choices.

Car insurance commercials….if you watch TV, you can’t help but see them. Whether there’s funny talking animals or offbeat spokespeople, these commercials for national insurance companies promise you the best price when you buy your auto policy directly from them. So, let’s do some comparison shopping using your local agent vs. direct from the company.

There are many ways to purchase your auto insurance. One way is to go online and try to figure out your needs, then hope you made the right choice. Secondly, you can use a captive agent who has the ability to use only one insurer. Lastly, you can go to an independent agent and let them search the market for the best possible combination of coverage, price, and service.

It’s important to understand that not all insurance policies or agents are the same. Car insurance (for that matter, all insurance) can be designed to fit your individual needs. All insurance policies have exclusions and these can affect claims. Insurance agents have different skillsets and offer different kinds of services. Keep these things in mind as you read through this post.

The Pros and Cons of Online Car Insurance

Online auto insurance is a process where you secure your personal insurance through an insurer’s website without the help of anyone. You must navigate through the information and try to make the decision as to what kind of auto insurance you need. As with all things, there are advantages and disadvantages.

Advantages of Online Auto Insurance Buying

  • Auto insurance can be purchased on your own time
  • Transactions are all automated
  • Your policy can be stored online
  • It may or may not take less time (depending on how computer savvy you are and whether you know exactly what you want)
  • Offers competitive premiums because you aren’t paying a commission

Disadvantages of Online Insurance Buying

  • If you have a question, you may not connect with anyone who understands insurance
  • You must become your own insurance agent
  • If you make a mistake, there is no one to look to for help or support
  • There is no help in filing a claim
  • Some types of auto insurance may not be available online
  • You must be able to understand and navigate through the application process
  • If you need custom coverage (like coverage for vintage autos, for example) an online program may not apply
  • You are not doing business with a local company. In many cases the staff is located in foreign countries

The Pros and Cons of a Captive Agent

A captive agent is one who is employed by an insurance company. These kinds of agents represent companies like Geico, State Farm, AllState, and Progressive. A captive agent is an insurance agent who only works for one company. The insurance company pays a captive agent, and he or she may be a full-time employee or an independent contractor.

Advantages of a Captive Insurance Agent

  • There are many locations around the country
  • Their rates may be competitive
  • Most of their staff are licensed
  • They can help you if you have a coverage question or claim issue

Disadvantages Of a Captive Insurance Agent

  • They can offer only one product option
  • They are paid by the insurer, so there may be a question as to where their loyalties lie
  • They have limited access to unique kinds of insurance products
  • Their company may require them to push certain kinds of insurance products

The Pros and Cons of an Independent Agent

An independent agent is someone who owns or operates a small, local business. They have relationships with many different insurance companies, but do not work for them. This allows the independent agent to work for you, the policyholder. Independent agents live and work in the community and usually support many local charities and causes.

Advantages of a Local Independent Insurance Agent

  • Customer Service – If you have coverage questions (or worse, need to report a claim) would you rather reach an automated recording or an actual person when you call your insurance provider? More and more companies have switched to automated systems, often making it difficult and time consuming to reach the right person. However, at many independent insurance agencies, an actual person will still greet and assist you. In the unfortunate event of a claim, your agent can help you report the claim as well as explain what exactly your policy covers.
  • Personal Shoppers – Working with an independent insurance agent can be compared to having a personal shopper. Similar to the way in which a real estate agent sorts through properties to help you find your ideal home, an insurance agent reviews the many different auto insurance company rates and coverage options to help you secure a policy that suits your needs. You may believe that this comes at an additional cost to you, but independent agents do not add extra changes to insurance company rates. So you can choose to work with an independent agent who will handle your coverage needs, assist you with claims reporting, and answer any questions you may have, from billing issues to coverage concerns, always advocating on your behalf.
  • Reputation – Reputation plays a crucial role in finding a company you can trust, and many independent agencies take pride in the years (if not decades) they have spent serving their local communities. Not only can a company’s many years of service speak to its well established reputation in the community, but it can also help you feel confident about its financial stability. Although there are many different ways to obtain insurance, would you rather obtain a quote from an internet insurance provider that advertised on television or call a local agent whom your friends, co-workers, and neighbors all recommend?
  • Knowledge – When you require legal advice, you contact a lawyer, and when a health issue arises, you visit your doctor, so when you need assistance within your auto insurance coverage why not rely on an industry expert? In addition to many years of experience in the industry, independent insurance agents have also worked with many insurance companies and are knowledgeable about their individual strengths. Although one insurance company may provide unmatched claims service, another may offer more competitive rates. Based on what’s important to you, whether it be a company’s service, rates, financial stability, or a combination of all three factors, an independent agent will find the best match for your specific needs.
  • Community Involvement – In addition to assisting you, many independent insurance companies also actively help your local community. As local business owners, many independent insurance agency principals place a strong emphasis on giving back to the community. From sponsoring fundraisers and donating to local charities, to volunteering and serving as board members for non-profit organizations, there are many ways you may witness your local insurance agents giving back to the community, which can make you feel confident about your decision to do business with them.
  • Local Knowledge – It can be rewarding to witness your insurance agents supporting the community, but another local benefit you may not think of is your agent’s knowledge of your community. As local residents, many insurance agents have lived in your area for years and use their knowledge of the community to help you better reduce your risks and protect your assets. After an automobile accident, your local agent can help with recommendations for the best repair shops, body, and glass companies. A national company cannot relate to you and where you live.
  • Saving Money & Time – Insurance companies that promise to drastically reduce your rates in minutes may seem cost effective at first, but working with an independent agent can save you money and time over the long term. Instead of providing you with an instant rate, independent agents will ask questions and take the time to familiarize themselves with your situations to ensure the auto coverage they design will adequately protect you. They will save you lots of time by being the one to shop around the various different companies to get you the best rates and the best coverage.
  • Understanding – Independent insurance agents understand that insurance can seem complicated and confusing, especially when you don’t deal with it on a daily basis. For this reason, your insurance agent will work to ensure that you fully understand your coverage, from what is and is not included, to the deductibles and limits you should carry. After you purchase your policies, an independent agent’s work isn’t over. Instead, he/she is available year-round to answer your questions, update your policy, and make coverage recommendations.
  • One-Stop Shops – At many independent insurance agencies, you can take care of all your coverage needs at once, limiting the number of different companies you deal with, and helping you stay organized. For example, if you own a small business you can likely secure commercial insurance coverage from the same agency that insures your car and home.
  • Protection & Peace of Mind – Above all, working with an independent insurance agent will provide you with peace of mind, knowing that when you save money it won’t come at the expense of comprehensive coverage. When it comes to auto insurance, your home, family, and business, relying on a local independent agent is a great place to start.

Disadvantages of an Independent Insurance Agent

  • Premiums are set by the insurance companies, not the agent. However, this is true of all insurance
  • They usually have regular office hours which means you can’t make a buying decision after hours
  • Agents are paid on commissions which are included in the premium. Again, this is true with all insurance agents

As an independent insurance agency, we are very knowledgeable about the companies in the marketplace. We know which companies have the best record of accomplishment when it comes to pleasing the policy holders. We can narrow your options down and help you choose the best insurance in the market to meet your needs. Give Hilton Head Insurance & Brokerage a call today and see how we can help you with your auto insurance needs, or any other insurance questions you may have.