When it comes to buying goods, almost everyone would agree that you get more bang for your buck if you buy wholesale instead of retail. Basically you're buying direct; you're cutting out another layer from which a third-party would seek to profit from your purchase.
Simple concept, right? Then why do people still buy insurance from agents rather than buying direct?
Here's the deal: Insurance companies will sell you most types of coverage direct from them. But they prefer you not go about it that way. Why? Because they'd rather you buy through their retailing agent, who is more likely to bring them bunches of other business. Oh sure, it costs you more, but insurers don't want you to know that, because it's more profitable for them to keep their agents happy and bringing them more business.
That's the dirty little secret that you'll never hear. Instead the insurer will tell you that it's important to have a local agent to help you with the purchase, and with claims service, blah blah blah. It's bullshit. Insurance agents don't want to spend time giving you service, they're on to the next sale, that's how they make money. Your claims issues can and will be handled by somebody else in their office, or perhaps a nameless, faceless person at claims headquarters.
Unless the insurer uses a direct-to-consumer model (the most famous is probably Geico), no insurer is going to tell you they'll sell to you direct. But they will, and it will save you a lot of premium dollars to do so - money that might otherwise be paid to the agent for no good reason. And no worries if you have a claim, you'll just end up dealing with the same cliams people you would if you used an agent.
So caveat emptor! If you need to buy insurance for your auto or property, or maybe even medical insurance, do some research and go direct. Your local agent will survive - by selling insurance to the vast majority of people who don't know how this scam really works.
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