When deciding how to protect your assets, you might ask, “Why use an insurance broker?” or “What are the benefits of an insurance broker?” Can’t I just do it myself? The answer often lies in the difference between an independent insurance broker and a captive agent.
I get this question a lot. You can certainly try to place your own insurance, although in reality, it is not practical. For starters, nearly all business policies need to go through a broker. And for your personal insurance needs, most of the better insurance companies also use independent insurance brokers or agents. Sure, there are “captive” insurance agents, such as Allstate and State Farm, although those agents are held “captive” and cannot represent other companies. That alone creates the opportunity for an agent to shop around and find a more optimal outcome, something a captive agent, who represents only one insurer, simply cannot do.
What Most People Get Wrong About Insurance Quotes
Besides the market dynamics favoring independent insurance brokers, there’s a more fundamental reason why almost everyone is better off not doing it themselves. Most people are in the “unknown-unknown” bucket of their self-awareness on matters of insurance–they don’t know what they don’t know. Think about the benefits of an independent insurance broker: someone who can explain what you’re really getting and what you’re not.
Also, let’s face it, insurance is not sexy or interesting. It is generally considered a boring afterthought of a purchase. Very few people will go out of their way to understand all the nuances about insurance. And, even if they were that motivated (I haven’t met anyone yet), it would be a very tall learning curve. A great example is looking at quotes. I’d like to break some truth to you about why use an insurance broker:
- Quotes, by themselves, tell you very little.
- It takes an experienced independent insurance broker/agent to understand the coverage behind the numbers.
- This is generally never disclosed.
- Only a broker who has good experience with the carrier and product will be able to stitch together insights into the coverage.
Wild, right? Welcome to insurance…it IS STILL the wild, wild west!
The Hidden Risks of Buying Insurance on Your Own
In addition to the structural forces and the educational aspect, there is another reason so as to why to use an insurance broker. That reason is the mindset. This is an upside-down purchase unlike any other product. You can’t just “kick the tires” before driving off the lot. Or you can’t hold it in your hand like a new phone and see if you like the features. Because one cannot experience insurance until a tragedy strikes, it is hard to wrap one’s head around the purchase.
The fundamental question, “What am I actually buying?” is a bit murky. I’ve surveyed many people on the most basic insurance purchase, such as a homeowners policy, and have asked, “Do you know the strengths and weaknesses of your homeowners policy?”Actually, 86% of people say they strongly understand their policy—yet when tested, most have major gaps in coverage knowledge. No one really knows what they just bought! That’s where the benefits of an insurance broker come in. A professional that can break things down, ask the right questions, and help you understand the details before you sign anything.
Buying Insurance With Intention, Not Confusion
If we look at the intersection of lack of awareness and importance of assets, I can think of no other industry other than the insurance industry that has such a big intersection! Prana Risk, as an independent insurance agent, helps change that mindset by following:
- Let’s work together by making the purchase intentional. Using an insurance broker can help you make an informed decision. Let’s embrace that not all products are the same, and you will generally get what you pay for. There is a wide range of choices, each with pros & cons. Let’s understand what the products cover and, most importantly, what the products do not cover. After knowing the facts, if you choose to simply price shop, that is a fine decision! That said, I rarely find this to be the case since humans are naturally risk-averse and usually want decent protection for their most valuable assets.
In addition to making the purchase with intention, the best outcome is when you don’t have to use the policy. I know it sounds strange, but let’s hope you don’t have a tragedy or setback in life. Insurance can help financially, but the emotional and physical toll and the tragedy it can cause are huge.
How Prana Risk Makes Insurance Shopping Easier
Yet a fourth reason to use an independent insurance broker like Prana Risk is that we can shop the entire market for you and get you the best outcome for your needs. It is very likely that the best insurance company for your situation is one you might not have heard about. Most of the better insurance companies use independent insurance agents because it is more efficient for them and it drives better customer service. Think about it.
Shopping the market on your own would be impossible since:
- You won’t have access to the markets.You wouldn’t be able to understand any quotes you get back, even if you had access.
- Filling out the applications would likely be beyond your skillset.Underwriters will have lots of questions, most of which you would not be able to answer.The insurance market is highly fragmented by location, type of risk, and type of business. And it is a huge marketplace. Knowing how to navigate the maze would be nearly impossible.
- It is still a relationship-based business. If you do not know the guards at the gate, they probably won’t let you in.
It is a RELATIONSHIP, not a TRANSACTION
When you call a company like Prana Risk, you are speaking to an entrepreneur who cares for his clients like family. You are getting valuable knowledge from a highly experienced professional who exudes the ripple effect! You are building a lifelong relationship with someone who will understand your needs and create a customized solution for you or your business. Call an insurance company where you see the ad on TV, and you are speaking to a call center. No relationship, generally lower quality help, no ripple effect. That’s the difference you get when using an insurance broker with real advice, real support, and someone who’s actually on your side. We are seeking a relationship for a lifetime, and we work tirelessly to earn your trust as your needs evolve over time.
There are almost certainly other reasons for choosing an insurance broker than the four I rattled off above, and hopefully, this helps raise some insights.
-Seth Patel
April 20, 2025
Wall Street, NYC
Founder & CEO of Prana Risk
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