There are two different types of car insurance companies that you can go with. We will discuss the difference between traditional and direct motor vehicle insurers.
Traditional auto insurance brokers
A traditional auto insurance broker will deal with you through an insurance broker. An insurance broker is a sales and customer relationship management person who has been designated by the auto insurance company to deal with customers. The insurance broker will help you choose the right auto insurance policy for your individual needs. The insurance broker develops a personal relationship with each of his clients, thus building trust in the insurance company. If you are dealing with a real person at your insurance company, you will feel more secure and cared for. The insurance broker will earn a commission on your premium, leading some people to believe that your premiums are therefore more expensive because of this.
Direct auto insurance brokers
Direct insurers are car insurance companies that have decided to cut out the middle man to save money on commissions. By dealing directly with the customer without going through brokers or middlemen, they are saving money. These types of insurance companies have to use excellent marketing tools to capture the attention of the public, since they do not have salespeople who contact the public. They often use the media to contact the public, such as television, newspapers, magazines, and radio advertisements. The direct insurer then has a call center where the client can contact it. Then all your details are captured through someone in the call center and then the policy contract is drawn up. A commission fee is paid to the call center agent, but this fee is one-time, not like the broker commission that is paid every month.
So how do you determine which insurer will be better and save you the most money? It may seem like a direct insurer will be a wise financial decision, but you should also keep in mind that sometimes the money you’ve saved on broker commissions has been spent on marketing. Advertising is a VERY expensive business, and direct insurers have to have a huge budget for it.
Regardless of which insurer you choose, you just need to make sure you’ve done enough research. Collect as many insurance quotes as possible so you can make good comparisons. Talk to your friends and family about who they are insured with. Ask for their honest opinions. Remember that your insurance needs are unique and you may pay less for your individual needs with one type of insurer than another, while it may not be the same scenario for someone else.