Buying Insurance

Lesson 1: The Basics

Big national or local agency?

Lastly is the matter of the choice between a large nationally advertised company and a local independent agency which may,but not necessarily, represent less familiar companies. The advantages to buying your insurance from one of the nationally advertised companies are:(1)they have agents on virtually every street corner and an office is likely to be readily accessible to you and (2)they are usually rated highly by Bests(see above); (3)they have facilities in both major cities and small towns so a move within state or cross country wouldn't require a change in company or policies. The disadvantages are:(1)the local agent is proprietary (insurance jargon:captive) which is to say he or she can sell only the types of insurance and policies issued by his/her company. The point here is that no insurance company issues ALL types of policies, nor is a single company necessarily competitive in all coverages and cost. (2)You will have to accept this companies "policies". That is, this company may not do something which you want to do simply because it is "against" company policy" i.e. they don't want to. The proprietary agent cannot offer you insurance with an alternative company which may have a different "policy". The pros and cons of insuring with an independent agency representing several companies are pretty much the flip side. As far as company ratings are concerned, you will find the independent agency also representing companies highly rated by Bests. The primary advantages with the independent agency are:(1) they are likely to be able to offer you more alternatives in both types of policies and coverages, (2) they are more likely to be able to offer other choices if something turns sour with your current company. The disadvantages are:(1)the agency office may be "across town" and not terribly convenient,(2)if you move you will likely be facing a change to a different insurance company. So, what do you do? It really comes down to comfort and need. If you feel more comfortable with a big nationally advertised company, have pretty much plain vanilla insurance needs, and are comfortable with the agent, go for it. If you prefer the idea of choices, or have some insurance needs the proprietary agent can't adequately meet, you may want to investigate some independent agencies.

  1  2  3  4  5