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All You Ever Wanted to Know About Insurance

Independent? Direct? Captive? Which Insurance Buying Option is Right for You?

EDMONDS, Wash. – Insurance is confusing. It’s challenging to understand and can be downright frustrating to navigate. I know - I live it every day. My dad started our agency in 1980 so it’s safe to say I’ve grown up in the industry. As a licensed agent for nearly 20-years and president of Insurance Services Group, I have heard and seen it all – countless rate increases, market shifts, company acquisitions, flashy gimmicks, the launch of online quoting – it’s no surprise a consumer, trying to save money, could get confused.

Online ads, TV commercials, radio spots inundate us every day – each with claims this carrier or that company will save you money on your auto and home insurance and it only takes a few minutes. Everyone is looking for ways to trim their budget – I get it – but my question to you is at what cost?

Difference Matters in Insurance

When it comes to insurance no two companies, carriers, or agents are alike. Every company is unique, coverages vary widely, and how you and your family are cared for changes from one insurance agency to the next. The important thing is to understand these differences ahead of time so once you sign on the dotted line you know what’s covered, what isn’t, and who to ask otherwise.

Choose Your Flavor Wisely

If insurance was ice cream – which flavor would you choose?

This question will make more sense when we compare the three main insurance buying options and the differences in how each one operates.

Direct Writers: ‘Self-Serve’

You know the names – the companies that spend billions of dollars on ads saying they can save you a “bunch” of money on insurance in just minutes. These companies are known as direct insurance writers. They provide the consumer access to get a quote and purchase insurance directly online or by calling an 800 number. This option is meant to be quick and easy – you decide what you want with very little contact from customer service representatives. Think of direct insurance companies like a self-serve shop – no one serves you until you’re ready to pay and you’ll likely deal with a different person every time you have a question. If you know exactly what you need when it comes to insurance going the direct writer route might make sense but if you are looking to have a thoughtful discussion about your needs, there are better options.

Captive Writers: ‘Vanilla’

Captive writers are insurance carriers with very specific products. Most likely you’ve seen a captive agent around town – they have a neighborhood office and they represent one particular company. With captives you know exactly what you are getting because they don’t offer choices – think vanilla. Captive writers are agents who will help guide you through the process and answer your questions but they are contracted with one company and its products and programs only. When that company raises rates or your needs change or vanilla just doesn’t suit you any longer, you will need to go elsewhere to find better protection and price.

Independent Writers: ‘31 Flavors’

Independent insurance writers don’t work for a company or companies. They work to deliver the best product they can find to their clients and they can do this because they have choices. In our ice cream analogy independent insurance writers can be likened to 31 flavors – the customer chooses what the customer likes best. Unlike direct and captive writers, independents have access to multiple insurance carriers and companies. It’s this access which gives independents the ability to shop insurance for their clients, comparing coverages and costs between companies. Independents are known to put the interest of the client ahead of their own.

Differences vary widely – from company to company, insurance writer to insurance writer, even state to state. As an independent it’s our job to make sure you understand these differences before you pay. Consider independents as a flavor fanatic – we love choices and we want to help you find the right one. With the option of 31 flavors, you will get the best coverage at the best price. It’s having your ice cream AND eating it too.

Trevor S. Campbell, CIC, is the President of Insurance Services Group, an Edmonds based independent insurance agency serving auto, home, and business insurance clients throughout Washington and seven other western states. He chairs the Washington Education Committee for the National Alliance for Insurance Education and Research. He is a past President for the Professional Insurance Agents Association of Washington and Alaska and was the 2013 Agent of the Year.