Mercury Insurance was first founded in 1961 by George Joseph in California. Mercury Insurance primarily insures automobiles offering affordable policies in more than twelve states in the U.S.

Joseph’s goal was to provide low-cost insurance alternatives and compete with the insurance giants. Especially popular was his private automobile policy, which offered coverage for a reduced premium. The strategy of the company was tight claims management and skillful underwriting of each policy.

Policies are only available through brokers and agencies, which keeps operating costs low for the parent company. Using local brokers also enables Mercury to have a presence in other states without needing a large and costly infrastructure. This strategy helps to keep the cost of premiums low, and minimizes the liability of potential mistakes made by their representatives.

All insurance companies apply similar criteria when assessing applicants and determining premium prices. These include vehicle age, make, safety features, the applicant’s age, gender, and their driving and claims history.

Mercury insures both private and commercial vehicles, as these two areas together account for over 75% of its business. In addition to motor vehicle insurance, Mercury is also very competitive on their homeowners, umbrella, business, and mechanical breakdown insurance.

Commercial insurance packages are tailored to meet a company’s insurance needs. Mercury has identified and specializes in specific niche markets like apartment buildings, printers, and contractors, along with retail and office packages.

The Mercury Insurance website allows potential buyers to get a quote online for their automobile insurance. Information on contact phone numbers for claims enquiries, payment centers, and customer service for each state that Mercury operates in are located on the site. It is important to find an insurance company that fills your particular requirements. Take the time to investigate Mercury Insurance Company as they have recently been recognized by Forbes.com as a Top Most Trusted Company in the nation for the third year in a row.

Is cheap insurance always the best way to go?

The answer quite simply is, well maybe.

Someone has to be the cheapest right? We see it in every facet of the free market. You shop furniture stores, car lots, surf shops, retail-clothing stores, Costco, and insurance companies.

Every insurance carrier provides different programs and coverage’s, in which they charge different rates. But why aren’t all the prices the same? We must first start at the beginning of the pricing process and ask the question, what is an actuary? An actuary is a business professional who analyzes the financial consequences of risk. Actuaries use mathematics, statistics, and financial theory to study uncertain future events, especially those of concern to insurance and pension programs, as defined by ‘The Mathematics Department at Purdue University’.

Based on this complex formula, carriers establish rates and guidelines for each of their products. Therefore, it would make sense that some carriers will provide cheaper insurance than others, based on what their team of actuaries determine.

Then there are some carriers that ‘strip down’ their coverage’s in order to reduce their risk or exposure, in an attempt to become the least inexpensive in the marketplace.

Therefore, the desired goal would be to obtain the most comprehensive policy at the cheapest premium possible.

So how do you find someone that you can trust and want to do business with? That is where a dependable, knowledgeable, and entrusted independent insurance agent enters the playing field. You need to find an agent where his character and honor outweighs the financial gain.

The word ‘Captive’ as described by Merriam-Webster; ‘held under control of another but having the appearance of independence.’

Some of the biggest names and certainly respected captive agencies’ are State Farm, Allstate, AAA and Farmers Insurance. All are very financially solid carriers being traded on the NYSE, and well known in the marketplace.

Very simply put; a ‘captive agent’ or a ‘direct writer’, is only allowed to sell for their respective company. State Farm can only sell State Farm. I need to note that there is an opportunity for each of these ‘direct writers’ to access a General Agent or a MGA (managing general agent), which represent non-admitted insurance companies. This topic will be covered in more depth in a future post.

There are a number of differences between these two types of agencies. An Independent agent has the following benefits:

• Freedom to access and quote different carriers (not restricted to one)
• Ability to compare pricing, service, and products among various carriers prior to quoting our clients.
• If an insurance company decides to discontinue writing a particular class of business, an Independent agent will approach other markets. Captive agents are under the control of the parent company. They’re not able to ‘shop’ and now the potential to keep that client and their business is in jeopardy.

The independent agent is not required to push certain policies over others to meet some requirements or other strict quotas.
From a business standpoint it seems to make the most sense to go with an agent that has the maximum amount of flexibility in choosing the right insurance carrier for a client’s unique insurance needs.