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Buying Car Insurance Online vs From an Agent

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

woman talking to insurance agent on phone at computer

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.

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Buying from an Independent Agent


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're 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 create a relationship that lasts the duration of your policy. And perhaps even longer. Any time you have a question or need help with your policy, your agent will be there to help you.


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 about how policies work at their company.

Captive insurance agents have intimate knowledge of all the available policies sold. These policies could include discounts or favorable terms. Captive agents create customized policies for you, instead of cookie-cutter plans that don'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,. That's because you wouldn’t have to pay a captive agent a commission.

A captive agent may be less forthcoming with information about other carriers than someone who isn't on the insurer’s payroll. There's little chance they'd recommend a competitor’s policy that would benefit their client more than their employer’s policy.

Buying Insurance Online

Do you need an insurance agent? Most insurance providers are now letting clients buy policies directly from them online or over the phone. Within minutes, you'll have quotes on several policies and be well on your way to the coverage you need. Compare quotes from top companies and buy insurance from them directly.


The process of getting a quote and choosing a policy can be lightning-fast. Your premiums will be slightly lower since you're 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 could keep a policyholder in the dark about the coverage they have access to. They may not even know 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 can “cherry pick” the numbers to make their policies look more better 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.

You may be talking to someone in a call center with limited knowledge or insight into your problem. Even when you're 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 you'll probably get better customer service.

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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'll be working with. Because of these variables, you should not make sweeping judgments about entire companies.

Similarly, a bad experience with one captive agent doesn't mean all captive agents are not worth dealing with. As in any industry, the quality of service often comes down to the individuals assigned to you.

Independent agents can vary greatly in terms of their quality of service 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. It can save 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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