What are the advantages of using an agent to purchase insurance?
Asked by: Myrtis Rath | Last update: January 11, 2026Score: 4.4/5 (8 votes)
Is insurance more expensive if you use an agent?
Fees and taxes are set by the insurance company, and in CA, agents selling admitted insurance policies are not allowed to add any additional agent/broker fees.
Is it cheaper to get health insurance through an agent?
You can use an agent's services for free.
A plan never costs more just because you choose to buy with an agent. When you understand the benefits of shopping through a licensed agent – and the fact that you don't have to pay more for using an agent – it's easy to see why shopping with an agent is the smart way to go.
Is it better to deal directly with an insurance company?
Obviously the insurance companies prefer to sell to you directly and avoid the commission, but it won't influence your pricing at all. So there's no reason not to use a broker who will walk you through the process, help you understand your options, and help you find the right policy for your needs and situation.
Do insurance agents make money off of you?
Agents typically get paid through commissions, which are a percentage of the insurance premium or on a federally regulated standard. This doesn't mean you should always try and sell the most expensive policy. When agents sell a new policy, they earn a higher commission rate compared to when that policy is renewed.
PROS & CONS OF BEING AN INSURANCE AGENT
Is there a benefit to using an insurance agent?
Access to More Options: Independent agents have access to a variety of insurance companies, which allows them to deliver more options. They will search through all the available options for you to bring you the best possible combination of price, coverage, and service. More options mean lower premiums for you.
Is it cheaper to get insurance through an agent or online?
Buying insurance online can often result in lower customer costs due to the elimination of commission fees for the insurance agent. However, buying insurance through an agent can offer a more personalized experience and in-depth policy analysis, leading to finding the most cost-effective coverage options.
Should you take the first offer from an insurance company?
Negotiation Leverage: Rejecting the initial offer opens the door for negotiation, potentially leading to a higher settlement. The best way to get more help is simple: Ask for it! You'll never have the opportunity to receive a larger claim settlement check unless you begin that conversation.
Should I trust my insurance agent?
In times of need, such as when filing a claim, having an agent you trust makes the process smoother, ensuring that your concerns are addressed promptly and effectively. In conclusion, trusting your insurance agent is crucial in securing the right coverage and achieving peace of mind.
What is the disadvantage of an insurance agent?
Additional Costs: One of the main drawbacks of using insurance agents is the potential for additional costs. Insurance agents typically receive commissions from insurance companies, which can increase your premium costs.
What percentage of insurance premiums go to the agent?
The common range is between 5% and 10% of a policy's total premiums for the first year, with the percentage going down after a plan is renewed.
How to choose an insurance agent?
- #1: Are They Independent Insurance Agents OR Captive Agents? ...
- #2: What Are Their Credentials/Licenses? ...
- #3: Can You Get a Referral? ...
- #4: What Type of Insurance Coverages Do They Offer?
Is it better to go with a local insurance company?
Tailored Coverage Options
They have the flexibility to offer customized plans that ensure you're neither over-insured nor under-insured. Whether you need additional coverage for a high-value home, a vintage car, or special riders for unique circumstances, a local agent is more likely to offer personalized advice.
Does Progressive use brokers?
You can choose how you want to buy your car or other vehicle insurance: directly from a Progressive company (online, by phone, or on a mobile device), or through an independent agent or broker.
Can insurance agents get better rates?
An insurance broker can save you a lot of time but can they save money for your business, compared to going directly to insurers? The short answer is yes. Insurance brokers get better rates by leveraging industry expertise and insurer relationships to find the right policy with proper coverage at appropriate costs.
Can I negotiate with insurance company?
The insurance company may make an initial offer, but it's often lower than you want. Counteroffer. You or your attorney can counter the initial offer with a demand for a higher amount, supported by evidence of your losses. Negotiation.
When should you not make the first offer?
If you value only the economic outcome of your deal, make the first offer in order to anchor the negotiation in your favor. But if you value satisfaction with the negotiation process more than the outcome itself, you may want to avoid the stress and anxiety of making the first offer.
Why is the first settlement offer so low?
Why Do They Always Lowball On The First Settlement Offer? If the insurance company is lucky enough that you accept the first low offer, it's better for them. The less money the insurance company gives you, the better their bottom line.
Do you pay more for insurance if you go through an agent?
Myth: It costs more to use an agent because you have to pay a commission. Fact: The insurance company pays the commission. You will pay the same amount for your health plan whether you use an insurance agent or buy it yourself. The difference is an agent can save you hours of time wading through choices.
Does it cost money to talk to an insurance agent?
Insurance agents are paid by insurance companies. You only pay for the insurance policy, or policies, you want. There are typically no agent or agency fees.
How do insurance agents get paid?
Insurance Agents get paid a commission (percentage of your premium) from your insurance carrier. You do not pay insurance agents directly. Instead, every time you make a premium payment, the insurance carrier pays the set commission rate to the agent or agency.
What is the profit margin of an insurance agent?
According to industry experts, most insurance agency owners operate with an average profit margin of 2% to 10%.
Why do insurance agents earn so much?
Most professionals who sell insurance are paid largely on a commission basis. In fact, most agents aren't even employees of the carrier. More often than not, they're independent contractors who are compensated based on how much they sell, with higher commissions for certain types of products.
Who is the highest paid insurance agent?
Gideon du Plessis failed in the 10th standard and never went to college. He is today the highest earning insurance agent in the world, with annual commissions amounting to Rs 7 crore (Rs 70 million) plus.