Convenience does not guarantee best price.

We most certainly live in a very fast-paced society. Although the economy is facing one of the worst recessions in recent history, convenience is still something that we all desire. When we shop for groceries we often use a local grocery store to do so, when we fill up our gas tank we likely use the service station close to our home or place of business.

In years past when you looked to purchase car or home insurance, you likely would go to your local insurance agent to do so. Companies like GEICO, Progressive Direct, Esurance have made purchasing insurance seem both easy and convenient. With their witty and comical commercials you seem to get the impression that you are assured to save money on something that we don’t necessarily want to spend a lot of time thinking about.

However what’s interesting about these companies is that they don’t necessarily offer the best savings opportunities for your insurance. Sure, you can get a quote, and buy your policy with a few clicks of the mouse, but do these companies really offer the best price?

You might be surprised to learn that you can receive a much better price from a local agent who lives right in your community.

GEICO, Progressive Direct, and Esurance plus the growing number of companies that sell their policies directly to the public spend billions of dollars to get their message out to the public. Those billions of dollars invested in advertising goes right into the price you pay for your insurance.

So before you are tempted to purchase a policy from GEICO, Progressive Direct, Esurance, or any company that does not use local insurance agents, take the time to get a quote from a local agent.

By doing so you will likely save more money compared to what one of these companies can offer you, plus you are purchasing insurance from a local agent, often a small business owner living in your community, not to mention someone you can meet with in person.

For a free insurance quote from a local agent in your community click here.

What drives these impressive sales numbers? Advertising, advertising, and more advertising.

In the year 2007 GEICO spent $751 million in advertising. Exact figures are not available for 2008 but a record $1 billion or more was estimated to have been spent to encourage insurance buyers to pick up the phone and call for a car insurance quote.

But here is the Billon-dollar question: Does GEICO have the best car insurance rates? If you buy an insurance policy direct with GEICO thereby cutting out the so-called middleman (the insurance agent) does that guarantee a better price?

In a word no, GEICO sets their insurance rates in the exact same way that other insurance companies set rates. GEICO spends a considerably larger amount of money on advertising than any of its competitors and a interesting fact insurance buyers may not realize is the money invested by GEICO in advertising for new customers, is reflected in the true cost of the car insurance policy you own with GEICO.

In other words if GEICO decided to spend no money next year on advertising in theory they could lower the rates for their customers by $1 billion!

That might save GEICO customers 15% or more on their GEICO car insurance policy!

The Agent Gurus Network recommends local insurance agents as a better option for consumers when they purchase insurance. Click here to receive your free quote and find out why professional advice and not just a price™ is a better option for consumers.

Some car insurance shoppers may assume this is true, so we decided to put these companies to the test. We evaluated insurance rates from GEICO, Esurance, and Progressive Direct, companies that sell mainly to the public directly, (although all 3 companies mentioned here also sell through agents) with companies who exclusively use agents to sell insurance policies namely State Farm, Nationwide, Farmers Insurance, Grange Mutual, Encompass, and American Commerce Insurance Company.

This actual car insurance comparison is based on a married couple living in the suburbs of Cincinnati Ohio, with no tickets or accidents in a 5 year period. Vehicles quoted are a 2008 Acura TL, and a 2004 Honda Pilot EXL. Coverage limits are 250/500/100 with matching uninsured and underinsured limits. $100 comprehensive and $500 collision deductible. Loan/Lease gap coverage and finally road side assistance plus car rental is included. (Neither State Farm or Nationwide offers lease/ loan gap coverage)

Name of Company and Monthly Price

Esurance - $114.37
GEICO - $113.75
Progressive Direct - $109.19

Nationwide – $127.45
Farmers - $117.84
State Farm – $107.22

Grange Mutual - $99.80
Encompass – $81.83
American Commerce - $73.00

In this case study, the assumed price advantage is not evident with companies such as GEICO, Esurance, and Progressive Direct when rates are compared with other companies who exclusively use agents to sell coverage.

In all fairness, a similar comparison in other parts of the country, or with different coverage circumstances may not yield comparable results as insurance companies use so many variable factors to set rates. So you should not rely exclusively on this simple case study as an indication of the competitiveness of the companies indicated. Rates vary by type of cars owned, specific rating territory, credit levels, coverage limits, and frankly too many other factors to mention.

However in this specific example a better rate can be obtained by companies using agents compared to buying directly from the insurance company.

The Agent Gurus Network recommends that you care for your insurance needs by using a local insurance professional versus a company that sells policies exclusively online or by the telephone.

It is our opinion that reviewing your coverage needs with a local professional insurance agent is a better option even if you need to spend a few extra dollars. Click Here to receive an insurance comparison from a local agent in your area.