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Insurance: The Convenience Misperception


When you are shopping for insurance, convenience is likely the most important “perceived” differentiator between choosing an independent agent and a large direct writer, closely followed by the price point. However, you’re usually not an expert in insurance and risk management, which can actually make the “do it yourself” online convenience a bit dangerous.  You may have been led to believe that coverage is all the same and the only thing you need to do is find the best price. Of course, the difference between a low price and a good value is really a matter of perception.

Many people think they save time by going online to direct writers to get a simple quote, instead of actually speaking with an independent agent. In reality, the time it takes them to go through the insurance acquisition process is probably the same for both. If you chose to do this on your own, you most likely will have to go to several different websites or call several insurers to find the best price. Just one call to an independent agent can mean one conversation and multiple quotes from multiple insurers. More importantly, an independent agent can ensure that the quotes provided are “apples to apples” for coverages and options. If you’re like most people, it’s really hard to tell the differences from one insurer to another without someone there who knows what to look for in order to give you good advice.

Insurance Coverage Warning Signs

Coverage red flags are too many to count when you look at some direct insurer’s approaches. If their primary marketing message is all about the lowest price of a policy, you might not focus on the things your coverage actually includes and the value it brings to the table.

Some direct insurer’s policies may have low auto liability limits, possibly leaving you unaware of the danger involved. For example, some companies might offer you a quote without enough uninsured motorist coverage. While this may save you money – this approach may potentially put you at risk of severe financial peril in the event of certain accidents.

When it comes to home insurance, the total limit for replacement cost coverage is a very common point of concern. In many instances, it will not account for things such as debris removal after tear down and current construction labor and material costs, which means you could end up with a payout maximum well below the actual cost to fully rebuild your home after a total covered loss. An independent agent however, can guide you to 150 percent or “guaranteed” replacement cost to reduce this risk, depending on assortment of insurance companies their agency offers.

Independent agents provide you with invaluable advantages because they are acting as a trusted advisor to you, the customer.

The Value of Insurance Advice

You should look at Independent agents as advisers rather than salespeople.

You will have different experience between going online for insurance than you will when you actually speak with someone. If you go online, you’re not really talking to anyone. You do not get advice from a human being at any point. If you go to a direct writer representative either by phone or into an office, you’ll get advice from someone, but that “someone” will only have access to one insurance company. They’ll tell you that they are working in your best interest, but they only have only one hammer in their toolbox – the company they are representing.

This is a serious issue, because matching the right policy with your situation and needs is very difficult when you are looking at only one company’s products. Whereas, if you go to an independent agent, they will typically have access to anywhere from five to 20 different companies. This allows an agent to best serve your unique needs, no matter what those are.

The difference is clear – an independent agent, acting as a trusted advisor – can customize your policies in accordance with your needs. The independent agent gives you invaluable context between the various insurers that will allow you to make the best choice.

The Value of the Relationship with Your Insurance Agent

In addition to potentially better protection against loss and a more consultative approach, there is another crucial advantage independent agents can offer you: the value of the relationship.

Imagine that you’re a homeowner. Typically, the agent lives in your community. They get to know you, and your life, and how it changes over time, allowing them to be your own personal risk manager and a consultative partner. If you’re just looking online for a phone number – you’re probably getting someone different every time you call. That puts you at a disadvantage.

Sure . . . cost is an important factor for you, but not what actually distinguishes large direct insurers from independent agents. Because independent agencies usually represent so many carriers, they can very likely match price points that you have currently or are finding in the direct marketplace. It is not going to be more expensive to use an independent agent than a direct insurer. Independent agents provide the following benefits:

  • They act as consultants who look out for your best interests – not those of a specific carrier.
  • They will create a policy that best protects your assets in ways that direct insurance writer often cannot.
  • They’ll work to make sure their relationship with you will grow in ways usually not possible with a direct insurance writer.
  • They’ll work to get your price as low as possible, thanks mainly to the wider variety of insurers they represent – then apples can be truly compared to apples.

In conclusion, you can clearly obtain huge benefits by working with a true and trusted insurance agent. To get started, click here to contact us today.