What are the pros and cons of buying insurance directly from an insurance company?

What are the pros and cons of buying insurance directly from an insurance company?

Sam Friedman (Editor-in-Chief, National Underwriter, Property & Casualty Edition) gives expert video advice on: Do I need insurance?; How much insurance do I need? and more...

The popular myth is that it's cheaper to buy directly from an insurance company. That seems to make sense: if you cut out the middleman, that cuts out a cost, therefore you're going to get a cheaper product. That's not always the case unfortunately, because if you don't know exactly what kind of coverage you need, you actually might be buying more than you need and paying more for it, so whatever savings you may have achieved by cutting out the insurance agent may have been lost by the fact that you're buying more insurance than you actually require. Another situation is that if you buy directly from the insurance company, you won't have that intermediary there on your behalf to help you through the process if you do have a claim. Thirdly, and most importantly I think, is if you buy directly from the insurance company, you're only hearing that company's point of view. If you deal with an independent insurance agent, these individuals are licensed to represent a variety of insurance companies and they can put you with the best company at the best price. If you deal directly with a company, you're going to be limited to getting quote, and whatever coverages are offered from that specific insurance company. They will always talk a good game and tell you, "We're always the best, we're the cheapest" etc., but you'll never really know that for sure unless you shop around. I personally think the best way to do that is through an independent insurance agent.