Progressive is an extraordinary company providing low rates and exemplary service. They are very easy to
do business with and provide several different ways to purchase a policy. Customers can buy a policy online
or over the phone to deal directly with the company, or through an independent insurance agent to receive
advice  and additional service from them. These attributes are well known by most consumers.

What is not so well known is that the price for a policy varies depending on how it is purchased. Each specific
risk will have a different price
when an independent agent is used compared to buying directly from
Progressive. It is a common misconception that a policy will always cost more when an agent is used.

Claims data from prior policies is a primary component companies use when determining rates for new
policies going forward. Progressive separates their data for policies purchased directly from them and those
through independent agents. Also, costs associated with acquiring and servicing policies is separately
determined. Assigning costs to the method by which a policy is purchased enables Progressive to “fine tune”
their rates, providing them a competitive advantage.

The misconception that polices are always higher when purchased through an independent agent comes
about because a sales commission is paid to the agent. Naturally, this expense increases the cost of a
policy. However, the functions performed by the independent agent replaces the work required by company
personnel which has a decreasing effect on a policy. Advertising, a very large expense, is also taken into
account separately. Independent agents incur the expense of promoting themselves, while the company
uses their resources to promote itself. It’s easy to see how the company spends a bundle to have Flo, the
Progressive girl, appear on television over and over again.

The car insurance marketplace is very competitive, motivating Progressive to change rates frequently to
keep rates as low as possible.
Calculating rates according to how the consumer buys a policy helps keep
rates lower overall for a Progressive policy. For consumers, it’s sensible to compare a rate received directly
from Progressive with one available through an independent agent. A policyholder receives the same great
service from Progressive no matter how they purchase a policy.

When receiving a quote from an independent agent, the consumer gains an advantage  from the ability to
compare rates and choose from a variety of companies offered by that agent. Also, this advantage remains
available at each renewal interval, providing the opportunity to save money again and again. One thing
independent agents are not able to do is provide the rate that is available directly from Progressive. To
ensure the lowest available rate from Progressive, shoppers need to receive one quote directly from the
Company and compare that with a Progressive quote offered by an independent agent.

Initially, Progressive offered their products exclusively through independent agents. When the Company
began offering policies directly, rates remained the same for each distribution channel. At one time, they re-
branded themselves for the independents with the name “Drive Insurance”. This was short lived in favor of
leveraging the one well known name, Progressive. Experiencing these changes as an independent agent, I
believe the current business model (same name, different rates) provides for the lowest overall rates with the
least confusion.

With a little knowledge and a lot of shopping, consumers can significantly lower their cost for car insurance.
Progressive is just one excellent company among many to purchase from. Receiving quotes from a variety of
companies and through a variety of purchasing methods is the best way to attain a low cost car insurance
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