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Direct Writer

Many people are faced with the decision of selecting between services of a direct writer versus that of an independent agent. Investing money in insurance policies almost always involves serious decision making processes because of the amount of time, money, and commitment involved in the purchase.

Direct writers are companies that do not affiliate themselves with insurance agents. For short, they don’t hire agents to distribute their plans to their target market. Examples of such companies are State
Farm, Country Insurance, and GEICO. A potential insurance buyer or customer calls them “direct writers” because the idea is for them to function as an extension of the insurance carrier. They follow the purchase of customers through providing assistance while they select policies. Also, they are the ones who are responsible in handling their customers’ policies. This set-up is made possible since direct writers only represent one insurance provider.

Some policy owners appreciate this type of approach offered by these types of companies. However, there are also disadvantages. For instance, when a customer needs assistance on an issue with claim; direct writers aren’t as assertive compared to independent agents. As mentioned earlier, they only represent one insurance firm. Since this is their business partner, they will be careful in carrying out their actions. If there is a case where the claims department of the insurance provider won’t recognize an official reimbursement, a direct writer probably won’t assert much on behalf of the policy holder. They will, more likely, prioritize their business relationship with the insurance carrier rather than a relationship with an insurance buyer or customer. You stand a better chance with an independent agent who won’t hesitate to push your case, in situations like this one.

An independent agent is the total opposite of a direct writer. These professionals usually own an office where an insurance buyer can meet with them personally. If there are requests or changes, a personal or over the phone meeting will be made possible. Majority of independent agents play host to several insurance carriers. A buyer will have more access to information, options, and products because an agent is not necessarily tied to one firm. For example, if a buyer is not happy with his or her current insurance provider; that individual may approach the independent agent and request for a transfer to another company that is better suited for that person. In addition, if there is any issue with a claim, the agent can discuss and negotiate with the claims department more aggressively knowing that whatever the results are; his or her income will not be affected. Again, this is the advantage of representing many insurance carriers.

Selecting where to go for your insurance needs completely relies on your tolerance and preferences. There is no right or wrong answer. It depends on an insurance buyer’s needs and requirements. Direct writers often charge cheaper since they don’t pay any commissions to agents, although, this is not always the case. Think about whether you would like to have personalized service, if you need to make changes regularly, or if these things do not matter to you. These will help you know which one is the better choice.