Where to Shop for Auto Insurance

There are several ways to get quotes. (Dreamstime/TNS)

By David Rodeck From Kiplinger’s Personal Finance

If you’ve decided it’s time to test the market for your auto insurance, you have several ways to get quotes and see what’s out there:

An Agent With a Major Insurer

One option is to reach out to an agent representing one of the major insurers, such as Allstate, Liberty Mutual or State Farm. They are known as “captive agents” because they only sell products for one insurer. This contrasts with an independent agent, who will typically represent about 12 to 15 different insurance companies.

Matthew Henaghan, an Allstate insurance agent in Hockessin, Delaware, says that independent agents usually don’t have access to all the products or the best rates of the big-name, blue-chip auto insurance companies, which primarily work through their own captive agents. He also says there is value in specialization. “I know the ins and outs of Allstate. If I had to deal with the products of a dozen different companies, there’s no way I would know them as well.”

Another advantage of working with a captive agent is that you could qualify for bundling discounts by having multiple policies, such as auto, home, life and umbrella coverage, with one company. This can lead to a significant reduction for all of your premium payments, including double-digit-percentage savings on your auto insurance.

Because a captive agent represents only one company, you would need to reach out to multiple agents in your area to get a range of price quotes as you comparison shop.

An Independent Agent

An independent insurance agent represents multiple insurers. “These are the professionals working in brick-and-mortar locations, like a strip mall, and they aren’t branded with a specific big-name company like Allstate or State Farm,” says Adam Pichon, general manager of auto insurance at LexisNexis.

When you contact independent agents, they will pull quotes from all the insurers they represent. They will look for the lowest rate not just for your auto, but also for your other policies. And they can mix and match insurers.

“If one company has the best auto rates, chances are they won’t also have the best boat, home, RV and umbrella rates,” Josh Bagby, president of Providence Insurance Advisors, an independent insurance agency in Athens, Georgia.

A Membership Organization

Organizations such as AAA and Costco partner with insurers to provide auto insurance deals to their members. Membership organizations may also offer programs such as roadside assistance and discounts for auto repairs. When you talk to insurers, Ellen Edmonds, director of external communications for AAA, recommends that you tell them about your memberships, too, because there may be special offers for members of groups like AAA.

If you’re serious about getting the best rate and willing to put in some extra time, Pichon suggests using all these approaches.

(David Rodeck is a contributing writer at Kiplinger’s Retirement Report. For more on this and similar money topics, visit Kiplinger.com.)

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