The first thing you never knew about insurance:

1. Your agent’s commission is already built into the insurance rates.

Often people think they’re getting a lower rate by skipping an agent (and thus the costs of commission) and going “direct” by calling a company over the phone or doing an internet quote. That’s not how it works.

Every company’s insurance rates come with the commission already built in as a fixed percentage of the premium. This commission goes somewhere, whether it’s to the call center you contacted, the company’s online marketing department, or to the agent you met with and bought the policy through. A company will offer you more or less the same price through every medium, whether it’s through an agent with a wholesale license or through direct marketing.

Here’s a different way to think about it. If you’re already paying a commission as part of the price of buying your insurance, what are you getting in return for your money? Are you getting the entertaining marketing campaign your insurance company created? Or are you getting an agent who can guide you into making the smartest choice with your policy?

Read on to find out the 2nd thing you never new about insurance.

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