What is the Difference between an Insurance Agency and a Carrier?

You may think that shopping for car insurance is easy enough to do on your own. If you have the right information, why not just go straight to a car insurance company? Well, there are actually tons of benefits that you may be missing out on if you go straight to a car insurance carrier. Here are 5 of the biggest advantages of working with a car insurance agency vs. a car insurance carrier.

What is the difference between a car insurance carrier and a car insurance agency?

For a client, the main difference between a carrier and an agency is the ability to choose different options. A carrier is an insurance company that will directly write and pay out a car insurance claim for only their products. An agency or insurance broker is a company made of a group of agents, or people who represent a carrier.

This is where the term “agent” can get confusing. There are captive/direct agents who work with only one carrier and independent agents who work with multiple carriers. If you use a direct agent to get car insurance, you’ll only be able to compare that particular carrier’s insurance plans. However, if you work with an independent agency, their agents can connect you with and write policies for multiple carriers. That way, you can work with someone who can help you compare different features for different plans across multiple companies.

In this way, independent agents can focus more on the client’s needs and saving the client money than direct carrier agents who are more focused on selling their company’s product. There are also other specific benefits to using an independent insurance agency or broker.

They can explain the process easily.

If you go directly to a car insurance carrier, they may start throwing terms at you that sound unfamiliar because they’re specific to that company. This may only give you a vague idea of what their policy covers. So, you may end up getting a type of coverage, limit, or rate that doesn’t quite make sense for your situation.

However, an independent agent that works with multiple carriers knows the lingo of all the different insurance companies they work with. That way, when they shop for your rates, they know which coverages are a true toe to toe comparison, no matter what each carrier calls it.

For example, one carrier may recommend umbrella insurance to help you cover costs that your regular car insurance may not. Another carrier may call this same type of insurance “excess liability.”  Another insurance carrier may add this coverage on as a rider. An independent agent will be able to truly determine if these types of insurance policies are the same and get you the best rate on what you need.

They know the exact type of policy you need.

Anyone can spit out a quote for your insurance policy if you provide surface level information. However, independent agents can dive deeper into your needs, your history, and your present situation to give you quotes on the insurance that fits your unique needs. That way, you pay for only the coverages you need and not a generalized plan generated by a computer.

They’ll take a more personal approach to your policy.

Let’s say you go through a significant life change like getting married or getting a car for your teenager. If you’ve worked directly with a carrier to get your car insurance plan, you may not talk to that specific agent again to solve an issue. You may start dealing with an automated phone system and customer service representatives who can only refer to computer notes.

If you work with an insurance agency, the agent you work with can help you manage your policy from the first call onward. They’ll understand the ins and outs of your changed situation. That way, they can work directly with you to alter your plan and still potentially save you money.

Additionally, if you have any issues with your policy, you know that there’s someone you can speak with directly – someone who already personally knows you and the history of your insurance plan. So, the independent agent can pinpoint the issue more easily than an automated system or a customer service representative who hasn’t worked with you from the beginning.

They can work with special situations.

Sometimes, major insurance companies will determine that a client or multiple clients in an area are too risky to insure. For example, you may have trouble finding affordable insurance if you have a spotty driving record, even if the reports were from years ago but are not quite off of your driving record. You may also struggle to find good rates on car insurance if you live in a coastal area or in an area that has a high crime score. Major carriers may also deny you coverage if your car is extremely expensive or if you’ve ever been non-renewed. These types of situations are considered “high-risk” for insurance companies, and they may reject or drop you from your car insurance because of cases like these.

So, while you may want to find an auto insurance carrier you’ve heard about through a commercial or word-of-mouth, but they may refuse to write your car insurance policy, or they’ll offer it to you at a higher rate.

However, if you work with independent agents, they’ll be able to use their industry knowledge to work with special carriers that will work with your unique situation. They’ll know about insurance companies that are willing to write policies for “high-risk” drivers. Plus, connections may allow them to, again, get you a better rate.

They can advise you on the discounts that are best for you.

You may know about discounts like bundling, combining policies if you’re married, multi-car discounts, etc. However, because a direct agent only has their company’s product as a point of reference, they may only recommend these options because they’re the cheapest for that carrier.

An independent agent can compare coverages across multiple insurance companies and may determine that it’s best to keep you and your spouse’s policies separate, or that it’s best not to bundle, or that you might be better off insuring different things with different carriers entirely. An independent agent can work with a much wider range of carriers to get you the most affordable options, regardless of your situation.

These are only some of the main ways you can benefit from working with an independent insurance agency like ours. To find out about the many other perks of working with our agents, just give us a call! Our agency has decades of combined experience under our belts and numerous relationships with trusted carriers. That way, we can get to know your specific situation and shop tons of options to get you unique coverage for the rates you need. Make sure you’re not missing out on the best car insurance at the best rates by filling out our online form today!