Insurance Agent vs Insurance Company – What's Really Better?

Here's a common example I encounter: A few months ago, a new client called me. He was sure he'd done the smart thing – bought home insurance directly from the insurance company, no 'middlemen.' Closed quickly and felt he'd saved money.

Three months later, he had a serious leak in his apartment. When he filed a claim, he discovered his policy doesn't cover pipe damage under the floor. 'Why didn't anyone tell me?' he asked. In this case, there was no one to explain the fine details – and it happened.

What Happens When You Go Directly to an Insurance Company?

An insurance company sells its products. That's not good or bad, it's just how it works. The rep you're talking to works for the company and presents their offerings. Generally, they won't compare options from other companies – that's simply not part of their role.

It happens to me often – a client comes in after buying insurance directly, and when I ask 'Why did you choose this policy?' they answer: 'It was the option they showed me.' Not necessarily a problem, but it's worth being aware of.

Why Do Many People Choose to Work with an Insurance Agent?

Most people aren't insurance experts. And why should they be? They have jobs, kids, businesses to run. They don't always know the difference between types of coverage or why one policy costs less than another.

It shouldn't be their job to understand this. That's what insurance agents are for – to help explain, compare, and match.

What Are the Benefits of an Independent Insurance Agent?

An independent insurance agent works with multiple companies in the market. They take your needs, check what's available, and present you with options to compare. This allows you to make a more informed decision.

The main difference? An insurance agent tries to match you with a solution from a variety of options, not sell you a specific product.

Long-Term Support – Why Does It Matter?

Something people only discover when they need it: insurance isn't 'buy and forget.' Life changes. You buy an apartment, have a child, change cars, open a business. Insurance needs to change with you.

An insurance agent can update coverage, combine different companies – health insurance from one, car insurance from another – whatever fits. And most importantly – they're there when you need them.

During a claim, a question, or a change – there's someone who knows your file and knows who you are.

What Happens When You File an Insurance Claim?

A claim is the moment you find out if your insurance meets your needs or not.

Going directly to an insurance company? Usually you'll deal with a call center, sometimes a different rep each call, and a process that may take time.

With an insurance agent? You have someone who knows the file, who knows what the policy covers, and who can talk to the right people. Important to clarify: an agent doesn't control the insurance company's decision, but they can ensure your claim is reviewed according to policy terms and that you're not being wronged.

Does an Insurance Agent Cost More?

This is a common question. In most cases, the policy price isn't higher when buying through an insurance agent.

The agent's commission is paid by the insurance company from the insurance premium, and generally doesn't increase the price for the consumer compared to buying directly. So essentially, you get service, support, and comparison – usually at no extra cost.

Insurance Agent or Insurance Company – Who Is It Right For?

Going to an independent insurance agent is right for those who want comparison between options, professional support, and someone who knows their file long-term. Especially for business owners who need customized insurance solutions.

If you feel comfortable reading policies on your own, comparing between companies, and managing things with call centers when needed – going direct might work. Everyone has different preferences.

Summary – What Should You Consider?

Going directly to an insurance company isn't necessarily a mistake – but it's limited to that company's options. You won't always get comparison or customized matching.

An independent insurance agent provides the option for choice, comparison, and long-term support. It's not for everyone, but for many people it can prevent issues down the road.

Remember the client from the beginning of this article? Today he's insured in a way that fits him better. After a half-hour conversation, we understood what he needed and what he didn't – and matched him with a policy that addresses his needs. Not necessarily the cheapest, but one where he understands what it includes.

Have a policy and not sure what it covers? That's exactly the kind of thing worth checking.

“Good insurance isn't necessarily the cheapest insurance. It's insurance that fits you. And a good agent is someone who helps you understand what you're buying – before you need to use it.”

— Edi Efraimov