Direct writer insurance companies sell directly to the public without local offices or commission-based agents. Clients can only contact them by mail, phone, internet/email, or fax. There are advantages and disadvantages for both clients and employees, and independent insurance companies may be better for those who want to speak directly with an agent or make frequent changes to their policy.
A direct writer is an insurance agency that sells directly to the public, rather than having agents with local offices selling insurance packages. It can also refer to the employees and agents who work at the main office of the insurance company. With no local offices, direct writer insurance companies can only be contacted by mail, internet/email, phone or fax. At both the agent level and the consumer level, there are advantages and disadvantages to dealing with direct deed insurance.
The main difference between a direct and a local insurance company is how the company sells its insurance to the public. Direct writers deal directly with the public without hiring commission-based agents to run local bureaus. The only agents hired are direct employees who are paid by the hour and may receive a commission bonus depending on the company; they are stationed at the main offices. Anytime someone contacts this type of insurance company, they will speak to one of these contracted agents.
With a lack of public offices and agents, the only way to contact a direct writer insurance company is by mail, phone, internet/email, and fax. For clients, this may be better than going to a local office, as the client may not enjoy dealing with agents face to face. Direct companies also allow the client to speak to superiors immediately if there is any problem or confusion.
For customers who want to speak directly with an agent, seeking an independent insurance company is the best option. If the client needs to make a lot of changes to their insurance policy, especially frequently, then independent companies may be better again, because the changes can be made immediately. The prices charged by both types of insurance companies are usually about the same.
There are also advantages and disadvantages of working as a direct writer. Independent agents are paid on commission. If the agent sells a large number of insurance packages, he will have a decent salary. If the agent doesn’t sell anything, they won’t make any money.
Insurance agents looking for riskier but potentially higher-paying work are often independent agents. There is no limit on profit as long as the insurance is sold. Those who are wary of the risks and want a steady paycheck usually opt to be direct writers, because the pay is hourly and guaranteed. The amount of insurance sold is usually not on the paycheck, so a direct insurance agent may earn less than a successful independent agent.
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