10 Nov Is Geico Good Enough? Differences between a Direct Writer and Independent Agent
Making decisions about your insurance can be difficult. Admittedly, you might not know what all the terms mean or what an appropriate level of coverage is. Initially, all you see are costs towards something you actually hope never happens. We get it — insurance is this thing you feel like you have to have, but not until the moment you have to use it. Because of this, you might be quick to check this off your to – do list and choose the advertiser you hear most as your insurer… but is that really the best option?
One of the most important, yet easiest steps you can take in making smart decisions about your insurance program is to understand the difference between Direct Writers and Independent Insurance Agents. While most people aren’t familiar with these terms, when you make a decision on who to use for your insurance you are often deciding between the two. So, how do you choose? We unpack the differences between a direct writer and an independent agent here to help you make the right choice.
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What is a Direct Writer?
A direct writer is insurance lingo for an insurance company or agent that sells only a single brand — Geico and Allstate are two examples. Think of direct writers as the insurance companies that sell their own insurance policies through in – house sales teams. They are sometimes referred to as “captive writers” in the industry because they are exactly that: they are held to selling only what their company offers, which in some cases can be limiting in terms of coverage and savings opportunities.
Unlike direct writers, independent agents have the ability to tailor products and services. In many cases, one agent has the ability to use over 25 different policy providers, ultimately presenting you with a spread of options, all at different prices and coverage level. On the surface, a direct writer and an independent agent both sell “insurance”, but if you dig a little deeper, you will see they are very different. Let’s take a look.
Common Differences Between Direct Writers and Independent Agents
#1 – Having a choice is key… And it can save you money as well.
In the case of insurance, finding the right carrier and coverage for your assets can result in sizeable cost savings. Where a direct writer is beholden to the promotions and policies passed down from their leadership, they are limited to only what’s available at that moment through their company. It doesn’t do you any good when they are offering special pricing on motorcycle insurance while you’re searching to improve your home insurance.
Because independent agents can represent more than one carrier, they can also help you price out options across all carriers they represent and compare not only the premiums, but limits to coverage and deductibles. They can sift through all of the available policies to uncover and present you with the right options – from all carriers that fit your needs. Who doesn’t like having options?
#2 – A one-size-fits-all policy is likely not the best match for your family and lifestyle.
Do you entertain your close family in your new addition? Have you sold your car or had a child move off to college? Are you thinking about moving? Life is always changing and with it, your insurance program should change as well
Working with an independent agent means you get a holistic, client-centric approach. That is, they get to know you, your assets, and your risk tolerance before ever making a recommendation on the right policy for your situation. Working with the same agent year after year, whose focus is on getting to know you means more personalized coverage for your needs and risk tolerance. This translates to greater peace of mind and savings down the road.
#3 – What you buy is oftentimes what you get.
A common misconception is that lower prices are always better. Especially in the case of home and auto insurance, lower prices can be another way of saying: lower coverage. A direct writer might tout their cost savings upfront, but what people often miss is what happens to their coverage because of that low, low price. Think you’re getting a deal because their website or agent says so? You always want to ask yourself “What am I really covered for?” and “Am I comfortable with that level of liability?”
Here’s a little food for thought. Think about what your house is currently insured for. Is it what you paid for your home years ago? Or does it reflect the upgrades and changes over time? Should something happen to your home and you need to evacuate, does your current policy cover temporary relocation or hotel costs? Does it cover the rebuild amount?
An independent agent will often help their customers understand the numbers beyond the premium to help them make the best decision. They can help you compare pricing, coverage, deductibles and more, at each price point so you know you’re covered when you need it.
#4 – Independent Agents mean you get someone on your side
Convenience is key for many – but what about with Insurance? With a Direct Writer, it is most common that you will be expected to go online to choose your policy and checkout, navigating this process on your own from the start. Building an insurance program is not the time to cut corners–upfront education and an understanding of what you’re covered for and why sets you up for success.
Should a claim arise, keep in mind that a Direct Writer will connect you with someone who is often meeting you for the first time. Filing a claim can be nerve-racking and frustrating for many and doing it with a stranger can make that even worse.
Working with an independent agent means you work with someone (a human, not a bot), from start to finish. Simply put, they will work you, prioritize your needs, and advocate on our behalf.
Customer Scenario: The Behind-the-Scenes Action that Saved this Customer’s Home
Have you ever had a service provider act on your behalf before you even knew you had a problem?
James, a home insurance customer of Clark Insurance, received an email from his agent, Heather, alerting him to an issue with his policy that she was already in the process of resolving. Three emails, one day, and not a finger lifted by James, Heather was able to resolve a situation before it really became an issue. You don’t get that kind of service just anywhere. Hear more about James’s story below. (Full Disclosure: James is also a Clark employee–talk about trust in your own product!)
Ultimately, choosing where you purchase your insurance from is your decision, but our advice is this: purchase your insurance based on the service you need and expect along the way. Insurance is not a one-size fits all commodity product and you deserve a complete view of your situation so your risks can be identified and managed effectively. While we may be biased, we highly recommend chatting with an independent agent. This simple conversation can pay itself back when it really counts.