There are several types of insurance agencies where you can buy any kind of insurance. The two most common ways of purchasing an insurance policy are through an agent/independent broker or through a direct insurance agency. Independent brokers have a number of large insurance companies on their panel that can give you an insurance policy depending on your budget and requirements. Agents and brokers receive commissions on such insurance deals.
Direct insurance agencies do not have brokers or agents acting on their behalf. You deal directly with the insurance company, look at several options yourself and then purchase an insurance policy. Direct insurance agencies can be exclusive or all inclusive, meaning they can be specialists in only one type of insurance (such as auto) or they can offer insurance policies in a variety of categories (such as travel, home, health and vehicle). Buying an insurance policy through an agent or a direct insurance agency your choice and depends on who offers you the best deal.
Pros of a direct insurance agency
If you plan to use a direct insurance agency, you need to know what benefits it has in store.
- Personalized customer service - Direct insurance agencies have well established customer service divisions. The customer service representatives are trained to handle all kinds of customer complaints, thereby ensuring prompt service.
- Cost effective - Direct insurers, such as Geico Direct and Direct Line, offer their customers economical insurance premiums. Online discounts and no-claims discounts are offered to new customers to minimize premium costs.
- Flexible payment options - You can purchase and pay insurance premiums to direct insurance agencies through several easy options. You can pay monthly, annually or up front. You can also make the payment via direct debit or credit card.
- Online option available - Direct insurance agencies have made it easy for their customers by making the online option available. You can check out insurance quotes, find out premium prices and buy a policy all at the click of a mouse.
Cons of a direct insurance agency
Using a direct insurance agency does have some downsides.
- Exclusivity - Sometimes a direct insurance agency offers insurance for only a single category, such as travel or medical. This can make it quite restrictive for customers who would prefer to buy all their insurance from a single provider.
- No comparison quotes - If you use a broker or an agent, you get the benefit of insurance quotes from several agencies. This way you can compare the quotes and pick out the best one for your situation.
- Change is difficult – If you are unhappy with your direct insurance company and intend to opt for another insurer, it may be difficult to do so. You cannot change your insurance company midway and you will generally have to wait at least 6 months before you are able to do so.
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