Independent Vs Captive Insurance Agent?

Many people ask if it makes more sense to buy their auto insurance through an independent agent or a captive/exclusive agent when they are looking to purchase or change their vehicle insurance. It all depends on what you value and your needs. This question isn’t right or wrong.

Consider whether multiple policies are important with the same carrier. This is something most exclusive/captive carriers excel at. They don’t have the entire market. Some independent insurance companies do well in this market, such as Safeco Insurance, which was recently acquired by Liberty Mutual. Although captive companies such as Allstate and American Family do well in this field, they may not be the most affordable or have the best coverage. However, if you are looking for the convenience of having all your policies with one company, a captive agent might be the right choice.

Many people simply want the best insurance possible. An 1-800 company such as eSurance and Geico may be able provide the right insurance for you. If you only compare prices, you could find yourself without coverage or even be sued. A policy that offers quality coverage does not have to come with a high premium. Affordable rates and quality products are indicators of a stable company. Many companies try to increase their market share. They offer artificially low prices and then have to raise prices several months or even a year later. A solid company is one with a track record of spreading their risks. You can find out the company’s rate increases over the past five years by doing an internet search. Also, you might want to check how much the increases were. A company that takes increases of less than 5% once a year may be a good choice. You might consider moving on if a company takes more than 5% per year or several smaller increases. This will likely result in a significantly higher premium for your next policy renewal.

A long-lasting relationship with an agent/broker is one of the most important qualities. A good relationship with an agent or broker can often save you money and keep your premiums in check. An independent agent is a great choice. Independent agents have contracts with multiple carriers. Agents can work with multiple insurance carriers to help them place you with the best insurance company for your needs and offer a price that fits your budget. Working with an independent agent allows you to shop for the best price, even if your current provider is taking a significant rate increase. An independent agent can help you maintain your relationship with your current agent, even if you switch carriers. This is unlike an exclusive agent who only represents one company. An independent agent has the advantage of being able to place every policy with the right carrier for you. An agent who is knowledgeable will help you determine whether splitting your policies among different carriers makes financial sense. In many cases, the savings from a policy are greater than the multiple discount offered by a company.

It is important to do your research and understand the basics of insurance before you buy. It takes training and time to learn what is and isn’t covered by a policy. People shop online for their first auto insurance quotes and then call an agent to purchase it. This is my opinion. You can then find carriers that offer a reasonable premium while still having the benefit of years of experience and training. Agents are required by the state to be licensed and must continue to learn throughout the year. It is strongly recommended that you do not purchase insurance through a website. This applies to auto insurance, home insurance, and any other personal lines insurance.