Insurance Car Insurance Car Insurance Basics Car Insurance and the Benefits of Having an Agent By Emily Delbridge Updated on May 31, 2022 Reviewed by Anthony Battle In This Article View All In This Article Do You Need an Insurance Agent? Three Sources of Car Insurance Having an Agent vs. Buying Direct Photo: lechatnoir / Getty Images The only way to purchase car insurance in the past was through an agent, but purchasing car insurance online is becoming more popular, raising the question of whether you even need an agent. Find out how to decide whether you need an agent, and what factors to keep in mind. Key Takeaways Only you can decide whether having an insurance agent you can call directly, email, or visit with in person at their office is important to you. The three sources of car insurance are captive agents, independent agents, and buying direct online without an agent. Benefits of having an agent include personalized service, knowledge of your area, and knowledge of discounts. Do You Need an Insurance Agent? Only you can decide whether the benefit of having an agent whom you can call directly, email, or visit with in person is worth more than the ease of buying a policy online. Buying insurance is key to your financial well-being. Knowing the coverage at the time of purchase, and as your needs change, is a crucial part of ensuring that you've limited your risk exposure. Three Sources of Car Insurance Here is a look at sources of car insurance and the role agents play in each: Captive Agent A captive agent sells just one insurance carrier. Their responsibility is to place business with one carrier. Some of the largest insurance carriers, such as State Farm, Allstate, and Farmers, employ captive agents. These carriers have 24-hour customer service centers. But captive agents may handle most of their clients' needs directly. Independent Agent An independent agent sells insurance through multiple carriers. They might sell mostly for one carrier, but they still can place business with other carriers if this benefits the client. Independent agents work directly with the client versus the insurance carrier. This allows a broader search of carriers within one agency. Auto-Owners, Citizens, and Hastings Mutual are carriers that use independent agents. Again, 24-hour customer service centers are available, but the agent handles most of the client's needs directly. Note Like independent agents, brokers can offer products from a variety of insurers. Brokers work for the consumer. They should represent and advocate for their best interests. Buying Direct Buying direct online means that no agent is involved in the insurance process. The client does most of the work by entering all the pertinent information online. Large online carriers include Geico, Progressive, and Lemonade. Having an Agent vs. Buying Direct: The Benefits Personalized Service Personalized service is something a lot of people still look for in the insurance industry. With so many automated services in force, it's a breath of fresh air to see a smiling face or get a person on the phone instead of trying to maneuver your way through voice prompts. Lots of questions, maintenance, and claims surround car insurance. Having an agent is convenient and helpful. You can always speak to the same person. This builds a strong relationship as compared to having to deal with a different customer representative each time you call. Knowing Your Area Having a local agent who knows your area is also a benefit. The agent can relate to you and to where you live. A local agent will know good body shops and glass companies to recommend in your area if you have a claim. Cash Payments Cash is becoming scarce. But there are still people out there who prefer using it. Most agencies still accept cash payments. Multi-Policy Discount One big perk for having all your insurance with an agent is the multi-policy discount. Most carriers offer products through an agent that include car, home, and financial services. You'll receive a multi-policy discount when they're combined. A lot of online companies aren't yet offering home or financial products, limiting your potential discounts. Fast Online Convenience Buying car insurance directly is super-fast and very convenient. You can go online at any time, day or night, and run your quote. You have to give all your personal information to an agent otherwise. Then you often have to wait for a call back. Directly purchasing your insurance online is a great way to go if you're pressed for time. Potential Savings It's possible to get a lower rate when buying car insurance directly. Direct carriers don't pay an agent commission, and the savings are passed on to the customer, but one carrier is never the best or cheapest for everyone out there. You'll still have to do your research on which is the cheapest for what you need. Agents are no longer mandatory in this technology-driven world. Whether you need an agent or not is driven more by personal preference for how you like to do business. Forgoing an agent is an option if you're comfortable with insurance terminology, and you fully grasp the details of your policy. The smartest option is to shop around for the best coverage at the lowest price, for friendly and responsive service and a carrier that suits your personal needs. Was this page helpful? Thanks for your feedback! Tell us why! Other Submit Sources The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy. The Midwest Insurance Agency Alliance. "Captive Agents Vs. Independent Agents." The Independent Insurance Agents & Brokers of America. "How to Start an Independent Agency." Insurance Information Institute. "Background On: Buying Insurance."