Now this blog may seem like an obvious sales pitch given it is part of my job to sell insurance at Holt Proctor McBriarty Insurance Agency in Milford, but most people are not aware of the different ways someone can buy insurance and why it really matters.
Not to be too technical (or boring) there are essentially three ways to buy insurance. These three different ways can impact not only what you pay, but how you are covered, so it is important to understand the process.
1. Direct company (like Geico)
People like Geico because of the perception that it is the cheapest way to buy insurance. Their commercials are based on the fact that they can save you 15% in 15 minutes, but this is certainly not always the case. I did an apples-to-apples comparison between my own car insurance and Geico, and the Geico policy was more money.
While quoting my car insurance, Geico asked me for an eight year driving history. Yikes! Even if you don't have any incidents when you first write the policy, keep in mind that if you do while with Geico, any accident or violation will be "on your record" for eight years. That is a very long time to pay for an accident or ticket.
I also take issue with the fact that if you have a billing or claim problem with a direct company, it is you versus a large company. You may not have the time or knowledge to fight Goliath without someone independent to help you along the way.
Most importantly, do you understand the coverages you are buying, or not buying, enough to ensure you are properly covered? Geico provides you with a quote first with the lowest coverages automatically selected including state minimum liability limits and $1,000 deductibles. Sure the price may look great at first glance, but how will you feel when you have a simple windshield loss and you are shelling out up to $1,000 when we typically write glass coverage with $100 deductible given the cost is minimal to have a much lower deductible.
2. Captive insurer (like State Farm or Allstate)
Companies like State Farm and Allstate sell their insurance products through agents, however the agents do not have flexibility with the rates offered. State Farm agents can only write with State Farm, so if you don't like the company or rate, that is all they have to offer. This can be a serious draw back if your situation changes and you need more coverage or pricing options.
3. Buy through an Independent Insurance Agency like Holt Proctor McBriarty Insurance Agency.
Independent Insurance Agencies are not tied to any one company. They can write insurance with any number of companies to offer their clients the best product and rate. This is a huge advantage because over time insurance rates and products change. The company that is competitive today, may not be tomorrow. The independent agent can not only write a new policy with a strong carrier, but can keep up with market trends and move clients as their needs change.
Another benefit is that you have a professional in your corner who actually knows insurance. If you buy insurance on-line, you have to pick the coverage, but do you know what to pick? Do you understand what you are, or are not, buying and what the consequences of these decisions mean? Everyone loves to save money, but at what cost in the end? It is wonderful to have an independent insurance professional explain the options to you so you can decide what is best for you - not guess.
Another benefit to buying through an independent agent is an ease of doing business. Our team, like many independent agent teams, spend a good portion of their day dealing with billing, claims, audit or inspection issues between our clients and the insurance companies. If you don't have someone representing you, that could be a good portion of your day navigating the phone system and voice mail of a large company.
Lastly, most independent insurance agencies are local businesses who support the local community. I take comfort in knowing that a business that is responsible for maintaining my financial security is staffed by a face that I know and can see out in public - not behind a faceless 800 number or web site.
So to recap the reasons why the best place to buy car, home or business insurance is through an independent agency: more options, personal service and competitive pricing.
As anyone who watches television knows, it is very difficult for an independent agency to keep up with the millions of dollars that Geico and Allstate spend on advertising. (According to Adweek, Geico spent $561 million in 2008). To help the smaller agencies, a campaign has been launched called Trusted Choice. Please check out their web site for more information about what an independent agent can do for you.