Let's discuss your different options when it comes to buying insurance and some questions to consider when deciding what method is best for you.
Different ways to buy insurance
Of course, you can buy a policy directly from an insurance company. You can purchase it from the company online or over the phone. You can still purchase insurance in person from one of the company's agents, too. An agent can answer your questions, but it’s important to remember that these agents represent the insurance company, not the insurance buyer (in other words, YOU.)
Insurance broker / advisor
Another option is to work with an independent insurance broker. A broker represents one or more insurance companies. If you prefer to have someone represent you who does not sell insurance but only gives advice, you can hire an insurance advisor to find an insurance company for you. An advisor is an independent contractor whose job is to help you identify your insurance needs and find an insurance company that can provide the appropriate coverage at a good price. Advisors usually charge you a fee for this service.
Bank or credit union
Finally, you can shop for insurance at a bank or credit union that owns or has partnered with an insurance company and hires agents or brokers who will sell insurance.
How much experience does your agent or broker have?
If you decide to go with an agent or broker, make sure they know their stuff. Because insurance is a complicated subject, people who sell it should be qualified and knowledgeable, and not just licensed to sell. Be sure your insurance agent or broker has enough experience to give you the proper guidance in choosing your coverage. Otherwise, you could wind up buying inappropriate coverage or overpaying for coverage.
Before buying insurance, find out how long the person you’re considering working with has been in the business and in what role. Also, ask if he or she has received any professional insurance designations, such as the Chartered Property and Casualty Underwriter designation. Find out if the person specializes in any particular types of insurance. Ask if he or she has attended any recent courses and whether he or she keeps up with the constant changes in the insurance industry.
What level of service do you want?
Take a moment to think about what kind of customer service is important to you. Then make sure your insurance company, agent, or broker can provide it. Here are some service-related questions to consider:
- Does the agent or broker offer advice about what kind of insurance you need?
- Will the agent or broker review your policies with you every year to make sure your coverage is up-to-date?
- Is the agent, broker, or a customer service agent at the insurance company available 24/7 to answer your insurance coverage questions?
- If you have a problem with a claim or a bill, can someone help you quickly?
- Is it important for the agent, broker, or insurance provider's office to be close to your home or workplace for in-person meetings?
Are you getting the lowest-cost insurance?
If you are getting quotes from more than one insurance company, be sure you compare apples to apples. Is the coverage the same for each company? Are the limits of coverage the same? Are there any exclusions in the policies?
Do your insurance needs require specialists?
Many companies specialize in certain types of insurance. Many brokers specialize in the needs of certain professions or businesses, too. For example, an agency may specialize in writing insurance for general contractors, truckers, or small-business owners. Many insurance companies have specific areas in which they excel, such as homeowners policies for houses over 100 years old.
Others specialize in providing contractors' bonds, directors' bonds, and officers' liability. To find out which companies' agents and brokers specialize in what types of insurance, contact your local insurance agents' and brokers' associations, see if your own professional organizations offer any suggestions, or search online.
There isn't one best way to buy insurance. Choose the option that feels right for you.
FAQs
If that insurer happens to offer online car insurance quotes, you may want to take advantage of it. It is generally cheaper to buy car insurance online, as there are no agent fees or markups. However, an agent can guide you through the purchase process and help you select the best coverage.
What are 3 ways to buy insurance? ›
Different ways to buy insurance
- Insurance company or agent. Of course, you can buy a policy directly from an insurance company. ...
- Insurance broker / advisor. Another option is to work with an independent insurance broker. ...
- Bank or credit union.
Figure out how much you can afford
Look carefully at policies with bargain-priced premiums - they might turn out to be too limited to be useful for you. Understand how the claims process works, how your providers get paid and what portion you have to pay. Ask if your providers are in the insurance company's network.
Is it better to shop around for insurance? ›
The biggest variable in your insurance cost will be the company you choose, so you'll want to shop around to be confident you're getting the best rate.
How can I get the lowest car insurance rates? ›
- To find the cheapest car insurance rates available to you, shop around with different insurers.
- Ask about discounts and usage-based insurance programs.
- If you drive an older vehicle, you likely can drop comprehensive and collision coverage.
Progressive insurance is not the cheapest auto insurer and is typically only cheaper than average for those with a DUI or other higher risk factors on their record.
What is the first step of purchasing insurance? ›
Step 1: Calculate your need.
This tool will help you build a net worth analysis and predict your potential long-term income and expenses. When looking at how to choose life insurance, use these numbers to help determine your coverage needs.
How do people buy insurance? ›
You can buy an individual policy from an insurance company, a licensed health insurance agent, or from Covered California- California's Healthcare Marketplace. You can reach Covered California at www.coveredca.com or call them at (800) 300-1506.
What is the most used type of insurance? ›
Most common types of insurance
- Auto Insurance. Auto insurance is designed to help protect you financially against vehicle damage and injury, depending on your coverage. ...
- Home Insurance. ...
- Renters Insurance. ...
- Life Insurance.
HMO plans typically have lower monthly premiums. You can also expect to pay less out of pocket. PPOs tend to have higher monthly premiums in exchange for the flexibility to use providers both in and out of network without a referral. Out-of-pocket medical costs can also run higher with a PPO plan.
Most experts agree that life, health, long-term disability, and auto insurance are the four types of insurance you must have. Employer coverage is often the best option, but if that is unavailable, obtain quotes from several providers as many provide discounts if you purchase more than one type of coverage.
Is Cigna good insurance? ›
Is Cigna good insurance? Cigna is a good insurance company, but it isn't usually the best option for most people. Even in the states where its rates are cheaper than the state average, Cigna usually isn't the cheapest health insurance. And its customer satisfaction is typically lower than average.
What is the cheapest day to buy insurance? ›
2. The best time to get car insurance quotes is 20 to 26 days before you need the policy to start. Your renewal notice from your insurer will show the new price for next year (and the price you paid last year). It's typically sent around 28 days before your current policy ends.
How to lower insurance premium? ›
Here are some ways to save on car insurance1
- Increase your deductible.
- Check for discounts you qualify for.
- Compare auto insurance quotes.
- Maintain a good driving record.
- Participate in a safe driving program.
- Take a defensive driving course.
- Explore payment options.
- Improve your credit score.
How often should I shop around for a new car insurance policy? There's never a bad time to shop for a better deal on car insurance. But you may want to consider reviewing your coverage and what you're paying at least once a year. Perhaps changes in your life have impacted your driving habits.
What is the disadvantage of insurance agent? ›
Unpredictable Income
While the insurance industry is stable and the income is lucrative, it can sometimes be hard to plan ahead and know where your next paycheck will come from, since your income may be solely based on sales made. To succeed in this field, you must be a go-getter.
Is there an advantage to using an insurance broker? ›
Insurance brokers can help individuals and business owners make sense of their insurance choices. Unlike independent agents who represent the insurance companies they work for, brokers focus on your needs. They work with you to learn more about what kind of insurance you're looking for and then present solutions.
Is it better to use a local insurance agent? ›
A local agent will be able to provide personalized advice, help you navigate complicated insurance policies, and provide you with peace of mind that your person or business is adequately covered in the event of an accident or disaster. Let's explore the benefits of having a local insurance agent.
What percentage of insurance premiums go to the agent? ›
It's usually a percentage of the policy's premium, but it varies based on the policy type. What percentage of insurance premiums go to the agent? On average, between 5-20%, depending on the policy and terms set by the insurer.
