Top 5: Reasons For Getting Insurance Through An Independent Agency

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Many consumers believe they benefit more if they purchase their insurance policies directly from the carrier.  However, contrary to popular belief, we have found that going through an insurance brokerage or independent agency was more beneficial to the client (as they are not directly employed by any one carrier).  In an article by Adam Bishop, dated February 25, 2010; he tested this theory by speaking to consumers to evaluate the benefits of buying insurance direct from carrier or through an agency.

When it comes to insurance, what is most important to the consumer?

In order if importance, Bishop lists the criteria and analyzes how each performs-purchasing insurance directly from carrier or going through an insurance agency.

1. Cost

“Contrary to popular consumer belief, we found that broker pricing was actually better than direct insurance pricing.” – Adam Bishop

The reason for this?  Insurance carriers provide different rates to insurance brokers, in order that premiums are lower.  And why would carriers provide special broker pricing?  Simple: because the risk is lower for the carrier.  Brokers are professionally trained to choose the right policy for their customers and to not under insure.  This helps to avoid unnecessary claims while maintaining the correct premium income.  Cutting out the insurance agent does not save money this time.

 2. Ease

At least half of the consumers began our test with the impression that buying policies directly would be the easiest option for them.  After trying both, almost all had changed their minds!

Yes, the online experience of getting a quote through a carrier site usually proved more pleasant than speaking to a broker on the phone.  However; with that being said, brokers also offer online services and were far, far more pro-active after they received the initial quote request from the consumer.  Often, brokers answer queries by personal email or call the prospective client, helping to reassure them with a human service.

Furthermore, most direct services dwindled when queries or changes were requested, particularly later in the policy life cycle.  Brokers outshone in their customer service – following through with requests-not only when the policy was issued but throughout the policy term.

3. Speed

In the case of time taken to generate initial quotes, direct services (online) were usually quicker, while some brokers answered quote requests by personal follow-up taking a little longer.  Direct services (online) would be quicker in the fact that they’re typically giving one quote from one carrier whereas; brokers “shop” by getting multiple quotes from multiple carriers to secure the best coverage for the best price.

The difference however was somewhat reversed when it came to mid term changes, documentation requests and one off queries.  The direct services often reverted back to large call centres whose staff had little or no real insurance knowledge.  In this area, brokers were more efficient, making suggestions our consumers found highly useful, saving them lots of time.

On balance, the speed at which quotes were produced by the direct services was not significant to our consumers when compared to the speed and efficiency with which brokers generally managed their policies throughout the policy life cycle.

4. Peace of mind that everything is covered.

Brokers were largely far more efficient at cross checking policies and were also very good at educating the consumers, explaining what types of coverages were available and answering queries.

Direct processes were better than in the past but, they emphasize that the consumer to do this work himself/herself.  However, with the legal insurance jargon, many times, consumers get overwhelmed with terms used and would prefer explanations from a seasoned agent.

5. Security of personal data

According to Bishop, this was a tough one to test.  Bishop’s technical team had to intervene.  They did however, take into account how consumers felt about their data security after using various services.

In the case of internet based services, the direct services tended to follow security guidelines marginally better than some broker services.  This was due to the size of the organizations involved and lack of good software on the part of some brokers.

On the phone however, we saw a different story.  Brokers, being far better equipped to deal with specific insurance questions and used to human discussion, gave people a stronger feeling that they were in safe hands.  The process of securing personal data was much the same as with direct, but the trust conveyed by brokers was far better.

As we conclude, getting your insurance through a broker was far more beneficial than going direct.  Although the conventional way of thinking dictates that there is no need for the middle-man (broker); Bishop’s findings prove the contrary.

Brokers can save you money, can ease the insurance process for you, can get the things you need quickly.  You will also have peace of mind that you have all the coverage you need and knowing that your personal data is secure.  Bishop’s recommendation?  Trust your broker, let him/her shop for your insurance, ask questions if you don’t understand and have one less thing to worry about.  If you’re looking for insurance, please feel free to contact us.  If you’re already insured through BDD, we do thank you for your loyalty.