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A direct writer is an insurance agency that sells directly to the public, instead of having agents with local offices sell insurance packages. It can also refer to the employees and agents working in the insurance company's main office. With no local offices, direct writer insurance companies can only be contacted via mail, Internet/email, phone or fax. Both on the agent level and on the consumer level, there are pros and cons to dealing with direct writer insurance.
The main difference between a direct and 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 offices. The only agents hired are direct employees who are paid hourly and may receive a commission bonus depending on the company; they are stationed at main offices. Whenever someone contacts this type of insurance company, he or she will talk to one of these hired agents.
With the 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 customers, this can be better than going to a local office, because the customer may not enjoy dealing with agents face-to-face. Direct companies also allow the customer to speak with higher-ups immediately if there are any problems or confusion.
For customers who want to speak with an agent directly, seeking out an independent insurance company is the better choice. If the customer needs many changes made to his or her insurance policy, especially on a frequent basis, then independent companies may again be better, because the changes can be made immediately. The prices charged by both types of insurance companies are usually about the same.
There are also pros and cons to working as a direct writer. Independent agents are paid on a commission basis. If the agent sells a high number of insurance packages, he or she will make a decent paycheck. If the agent does not sell anything, he or she will not make any money.
Insurance agents looking for a riskier but potentially higher paying job will typically be independent agents. There is no cap on earnings as long as insurance is sold. Those who are wary of 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 figured into the paycheck, so a direct insurance agent may make less than a successful independent agent.