Direct Auto Insurance vs. Insurance Agents: Which Is Better?

Insurance costs are on the rise and most consumers are looking for ways to save money on their car insurance premiums. For many, the question comes down to either purchasing insurance through a direct auto insurancecompany, or going through an agent. There are pros and cons to both types of insurance companies, which we will cover in depth in this article.

When you compare car insurance rates, make sure you know what you are purchasing. The more coverage you buy, the more expensive your rates, in general. For example, a minimum coverage policy, which gives you just enough insurance to make you legal, will be cheaper than a full coverage policy, which will cover both you and the other driver in the event of a motor vehicle collision.

Here’s what you should know about car insurance companies:

Pros and Cons of Direct Auto Insurance

A direct insurance company generally offers only policies on vehicles, but may extend coverage to boats, RVs, and motorcycles. With a direct car insurance company, you do not deal with a single agent. Instead, if you have questions or need to file a claim, you call an 800 number and work with a customer service representative.

On the plus side, a direct insurance company is generally cheaper than an agency. If you need only discount car insurance, such as a liability-only policy and rarely expect to file a claim, this can be the least expensive, most hassle-free way to buy insurance.

On the other hand, if you own a home and want a discount by pairing your car insurance with your homeowner policy, you are out of luck. Many policyholders also balk at not having just one agent to deal with and get frustrated with customer service at these big companies.

Pros and Cons of Insurance Agencies

With an insurance agency, you deal with one agent who can service all your insurance needs, from home insurance to car insurance. If you need to file a claim, you work first with this agent, though he or she may refer you to someone else during the claim process.

The pros of using an insurance agency are pretty obvious. You have one person to call if you need to ask questions or make a claim. You can combine policies for a discount. You can also get personalized advice on which type of insurance is best for your needs.

On the other hand, going through an insurance agent can be more expensive, even with discounts, than going through direct insurance. In addition, dealing with one agent can be just as frustrating as dealing with customer service at a large company.

Which Should You Choose?

Ultimately, the decision of which car insurance company to choose rests with you and depends on your needs. If you are just on the lookout for cheap car insurance quotes, you can make inquiries with both agents and direct insurance companies to see which offer the best coverage and service for your budget.