Direct Writer or Insurance Broker — Who Should You Work With?

Roughly 2.66 million people are employed by the insurance industry in the United States. However, most of us will only have direct contact with a handful of people working behind the scenes, with the most significant person being the individual who helps us get and use our coverage. This person is either a direct writer, who represents one insurer, or an insurance broker, who can offer insurance products from a range of insurers.

Direct Writers and Brokers: What’s the Difference?

Since direct writers and brokers can both connect you with insurance policies, it can seem like they’re different titles for the same function. However, this isn’t the case. These two roles are different when it comes to what policies they can offer you and who they work under.

A direct writer is a specific insurance company that uses its own employees to distribute insurance products offered only by that company. This means that while a direct writer can connect you with insurance policies, they can only offer you policies and products issued by that specific insurance company. You then work with the employees of that company for all your policy needs, such as filing claims.

An insurance broker is independent. They aren’t affiliated with a single insurance company or carrier, but rather work with numerous providers, resulting in the ability to connect you with a wide variety of options when you’re searching for a policy. Unlike a direct writer, Leap | Carpenter | Kemps works for you, the insured, no matter which insurance carrier – or carriers – you choose.

Is One Better Than the Other?

Working with a direct writer could be more beneficial. For instance, if you’ve spent time researching and know you want your auto, home, life, liability or business insurance from a specific carrier, a direct writer may be a good option. And, if you choose to get all your insurance policies from the same direct writer, you may qualify for a multi-line discount.

Independent brokers are more like your personal insurance shopper. There are a wide variety of carrier and policy options for them to research on your behalf. The broker can seek out the best coverage and best pricing for you. If you are looking for policies to cover multiple lines, the broker can source these from multiple carriers to best meet your needs. When it comes to filing claims, since the broker doesn’t work for the insurance company, they may be more likely to have their clients’ backs during a claims dispute.

Once you understand how direct writers and brokers are different from each other, you may conclude that working with a broker is better than working with a direct writer since there’s more opportunity for the independent broker to create a tailored policy with the best pricing. And coming to this conclusion makes sense: brokers do offer more variety and work for you. But think about all the aspects of the insurance coverage process before deciding. The better option truly depends on your insurance needs and preferences.

Finding the Best Prices

If you’re set on a specific company, a direct writer employed by that company will have an in-depth knowledge about his or her company’s products and be better positioned to quickly get you a quote on the policies that you need.

However, if there isn’t a specific provider you want to work with, finding the best policy coverage and prices on your own means doing a lot of research. An independent broker can do all this research for you. A broker can compile a list of policies at various price points and explain their various benefits to you, making the decision process easier.

Different Approaches to Bundling

Direct writers often offer discounts for bundling policies for their specific company to give you the lowest possible rates for multiple policies. Independent brokers also do this, and can obtain these discounts from many companies, not just one. Additionally, the broker can determine if you would be better off bundling different policies across different companies. For example, you might be able to bundle car and home insurance with one company and life and disability insurance with another and pay less than you would getting all of them from a single provider.

Policy Management and Filing Claims

The manner in which you service your policy and file claims differs between the direct writer and broker. With a direct writer you are responsible for communicating directly with the carrier to make policy changes or file claims. You, as the policy holder, are then responsible for making sure all changes are done correctly and claims handled timely.

When using a broker, they can typically submit the changes on your behalf and provide you with a confirmation they have been processed. A good broker will make sure the changes are accurate and will work to correct anything that is not right. The same goes for the handling of claims. You will most likely have to talk directly with the carrier to report a claim, but your broker will follow-up to make sure the claim gets handled properly.

A Personal Touch

Direct writers tend to work with thousands of clients at a time. Brokers take on a smaller number of clients and since they work for you, you get more of a personal touch. It’s also easy to find a brokerage firm that is located near you. This gives you the option to work with them in person whenever you need help.

When it comes to obtaining California insurance policies, both brokers and direct writers can help. The best choice comes down to your needs and preferences.

Find an Insurance Partner. Download our Free Guide today!

Leap | Carpenter | Kemps Insurance Agency Can Answer Your Questions

At Leap | Carpenter | Kemps Insurance Agency, our founder chose the independent model to provide our customers with the best coverage and prices for their needs. We know that navigating the many companies in the insurance industry can seem difficult, but we’re here for you and can answer any questions you may have. Contact one of our knowledgeable agents today.