Should You Buy Car Insurance Online or From an Agent? #car #insurance #ca

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Should You Buy Car Insurance Online or From an Agent?

November 9, 2015 Jill Liphart

Should you buy car insurance from insurance agents or directly from insurance companies? The truth is that each has its advantages and disadvantages. To fully understand which option would work best for your personal needs, you will need to explore the major differences between these options.

Buying from an Independent Agent

There are two main types of car insurance agents: captive and independent. Independent agents generally work for themselves or as part of a small firm. These agents can sell car insurance from a variety of different companies. Many also offer health insurance, life insurance, business liability insurance, and similar products. Compare quotes from local Independent agents .


An independent agent can provide you with a rate quote from several insurance carriers allowing you to select the one with the lowest rates. Since they are usually not receiving incentives for steering you toward one particular company or policy, the answers you get are likely to be objective and in your best interest.


As for drawbacks, an independent agent will charge a fee for their services on top of your policy premiums. The benefits of their impartial advice can come at a price that many people are unwilling to pay.

Buying from a Captive Agent

A captive agent, sometimes called an exclusive agent, works for one particular insurance company. When you buy a policy from a captive agent, you are likely establishing a relationship that will last for the duration of your policy, maybe longer. Any time you have a question or need assistance with your policy, your agent will be there to help you as soon as they are available. Compare quotes from local captive agents .


This interaction with one person benefits policyholders because they have a personal representative when interacting with their insurance company. They can have someone to talk to the company on their behalf if something isn’t going in their favor. You can learn a lot from a captive agent’s responses to your questions and explanations about how different policies and insurance mechanisms work at their company.

Captive insurance agents have intimate knowledge of all the available policies their company sells, including ones with discounts or favorable terms for your needs. They may be more able to create a more custom policy for you, instead of a cookie-cutter plan that doesn’t meet your needs.


Buying insurance through a captive agent does mean that the agent will receive compensation for their services. This usually results in slightly higher monthly premiums. However buying insurance from a captive agent will be cheaper overall than an independent agent, other things being equal, as you wouldn’t have to pay a captive agent a commission.

A captive agent may be a bit less forthcoming with information about other carriers than someone who is not on the insurer’s payroll. For instance, there is little chance that they would recommend a competitor’s policy that would benefit their client more than their employer’s policy would.

Buying Direct

Most insurance providers are now letting clients buy policies directly from them online or over the phone. Within minutes, a person can have quotes on several policies and be well on their way to having the car insurance they need. Compare quotes from top companies to buy insurance from them directly .


The process of getting a quote and choosing a policy can be lightning-fast. Your premiums are likely to be slightly lower since you are not using an agent’s services for most of your policy interactions.


The nature of the policies and quotes a company gives for direct inquiries can be more easily misunderstood. Users may not read the fine print or could become confused at their policy’s terms. This information disconnect could keep a policyholder in the dark about the coverage they have access to or what their real cost per month will be.

You may have to do a lot of work to compare real quotes from different companies. Agencies that advertise quote comparisons on their site can “cherry pick” the numbers to make their policies look more attractive than their competitors.

Another issue is that direct customers do not have the luxury of a specific insurance agent working their claims. Companies that use direct buying options still have insurance agents in their employ, but specific agents are rarely assigned to handle a single client’s needs.

Clients may be talking to a phone operator with limited knowledge or insight into the solution of a problem or the answer to a question. Even when you are able to talk to an agent, you may never speak to the same person twice.

In the end, buying insurance from a company directly may save you a few dollars a month, but as the saying goes, “you get what you pay for.” Using an agent, either independent or captive, can give you more insight into your policy options and likely better customer service.

Making a Choice

Even with these guidelines, every insurance company is going to be different. Some departments or policies may have better service and terms. Often, the area you live in determines the branch office you will be working with. Because of these variables, you should not make sweeping judgments about entire companies.

Similarly, a bad experience with one captive agent does not mean that all captive agents are not worth dealing with. As in any industry, the quality of service often comes down to the individuals who are assigned to you, or who happen to be in the office that day.

Taking this idea further, independent agents can vary greatly in terms of the quality of service they provide and the policies to which they have access. Shopping around for an independent agent becomes just as important as shopping around for a car insurance company. Seek out businesses with a reliable reputation and who specialize in your particular demographic to find the best service.

Since buying direct can be a gamble, do not assume that one good experience characterizes the entire process. In some cases, buying direct can be a great decision that saves you money without costing you any quality of service or coverage. Other times, trying to repeat a past success you or someone else had could result in disaster.

Remember to shop around and weigh your options carefully. Depending on your priorities, working through a captive agent, an independent agent, or buying direct may be your best option.

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