It can be difficult to understand the policy details, limitations and exclusions and how they are covered. You have two options: go directly to the insurance company or use an agent who is a captive. But there’s another option: an independent agent.
Each of these options can be used to purchase auto, home or business insurance. However, there are pros and cons. You should consider the differences between an independent agent and a captive agent. Also, you need to decide if it is better to purchase insurance directly from a company.
What is an independent agent in insurance?
Independent agents work with multiple insurance companies in order to provide a complete range of insurance products that meet customer needs. Captive agents are only allowed to work with one insurance company and can only offer the products that company offers.
A 2018 Agency Universe Study conducted by the Independent Insurance Agents & Brokers of America, Inc., found that there are approximately 36,500 independent agencies in the United States. The IIABA has partnered up with 47 insurance companies in the country. These insurance agencies can then access their network. Independent agencies represent insurance companies that have the Trusted Choice logo.
What are the benefits of independent agents in insurance?
Working with independent agents is more advantageous than working with captive agents.
Multiple quotes from different companies
Working with an independent agency to insure your insurance is a great benefit. Independent insurance agents have access to multiple companies so they can compare rates with many companies.
It is easy to give your household information once. This saves you time. Independent agents will offer you the best rate possible so that you choose them. This could save you money over shopping with a captive agent or doing it yourself.
If you change providers, agent can stay with your company
Your agent will let you know when your policy is due for renewal. Independent agents can help you decide if it is better to switch companies or stay with the same company.
You can still keep the same agent even if you change insurance carriers. This will allow you to establish a relationship with your independent agent, regardless of which company you choose for your insurance policies.
Personalized customer service
Independent agents are able to provide personal customer service and can even be used as captive agents. However, they will do everything possible to ensure that your business is not lost to another agency. This includes answering your questions about rates, coverages, claims and filing claims for you. Your independent agent can help you resolve any issues with your coverage.
Your best interests
Independent agents can provide personalized customer service in addition to personal customer service. They are not subject to the same restrictions and rules as captive agents. This allows them to use their knowledge about companies and policies and guide you in the right direction. Independent agents are paid a commission. This means that they receive a portion of your premium. It is in the best interests of an agent to keep their clients satisfied.
Insurance companies that are smaller
Although they are often able to work with smaller companies such as Progressive and Nationwide, independent insurance agencies tend to work with mid-sized insurance companies. Independent agents may offer you a quote from an unknown company, but they will still be able to provide the best insurance coverage for you and your family.
What are the drawbacks of independent agents?
Although there are many benefits to working with an independent agent for insurance, there are also drawbacks.
Understanding policies
A captive agent can be a great resource because they have a lot of knowledge about the company they represent. They are experts on the company, including the policies, discounts available, and how to get the best deal.
Independent agents may work with several insurance companies so they might not have the same knowledge about all of them and their policies. Independent agents may not be aware of certain discounts or coverages that you might need.
Agents receive less support
Because they are not associated with one company, independent agents often receive less support than captive agent. The parent company will often provide training, support, and resources for captive agents. Independent agencies will need to manage their own resources. This can impact the agency’s stability.
What other way can you buy insurance than through an independent agent.
There are many other options for purchasing insurance if you don’t wish to work with an agency or independent agent.
- Consider using a captive agent. If you prefer a specific insurance company with captive agents instead of an independent agent, Captive agents have a good understanding of the company they represent and will be able get you the best insurance rate.
- You can purchase directly: You can get insurance quotes online and over the phone.
Questions frequently asked
Is it worth being an independent agent?
An independent agent is usually free and can help you save time. Independent agents may be able find you a better deal on your insurance. These benefits may not be worth the cost, but you have to decide if they are worth it.
What does it take to make independent insurance agents rich?
Insurance companies pay independent insurance agents a commission for placing policies. The independent agency will also receive a commission for renewals or policy changes that result in a premium rise.
