Buying insurance can be overwhelming when you consider all the information you need and understand insurance policies, limitations and exclusions. While you can buy insurance directly from an insurance company or use a captive agent, there is another option: an independent agent.
There are pros and cons to using any of these three methods for buying car, home, business, life and health insurance. Consider the difference between a captive agent and an independent agent, and whether you should buy insurance yourself directly through the company.
What is an Independent Insurance Agent?
An independent agent works with several insurance companies to offer a complete range of insurance products to meet the needs of consumers. Captive agents only work with one insurance company, offering only products offered by that particular company.
According to Agency Universe Exploration 2018 According to Independent Insurance Agents & Brokers of America, Inc. (IIABA), there are approximately 36,500 independent insurance agencies in the United States. IN IIABA has partnerships with 47 insurance companies nationwide, which independent insurance agents can access through their network. If an insurance company has a Trusted Choice logo, it is represented by independent agencies.
What are the advantages of independent insurance agents?
There are several advantages of working with independent insurance agents over captive agents.
Multiple quotes from different companies
One of the best benefits of working with an independent insurance agency is the ability to buy insurance rates for you. With access to several companies, an independent insurance agent can check rates in several companies at once.
You only need to provide information about your family once, which will save you time. Independent insurance agents want to provide you with the best insurance rate, so you will choose them, which can save you more money than buying yourself or working with a dependent agent.
The agent can stay with you if you change the provider
When your policy is renewed, your agent will know. The Independent Agent can learn about premium increases and purchase better rates to help you determine if you should stay with the same company or switch sides.
Even if you change insurance company, you can stay with the same insurance agent. This can allow you to build a relationship with your independent insurance agent no matter which company you choose for your insurance policies.
Personalized customer service
While dependent agents can also provide personalized customer service, independent insurance agents will work hard to keep your business from going to another agency. This means answering questions about rates, coverage and claims, or filing claims on your behalf. If there is a problem with your coverage or claim, you can rely on your independent insurance agent to help resolve your problem.
Aside from personalized customer service, independent agents are not bound by the same rules and regulations as subordinate agents, so they can use their knowledge of companies and policies to guide you in the right direction. Most independent insurance agents work strictly on a commission basis, which means they are paid a percentage of the premium. It is in the agent’s best interest to make customers happy.
Small insurance companies
Independent insurance agencies usually work with small to mid-sized insurance companies, although they do work with some of the larger companies like Progressive and Nationwide. An Independent Agent can provide you with insurance rates from an unknown company, but one that still meets your needs and offers the right coverage for your family.
What are the disadvantages of independent insurance agents?
While there are several advantages to working with an independent insurance agent, there are also some disadvantages.
Knowledge of politics
One of the benefits of working with dependent agents is that they are usually experts in the company they represent. This means they know the types of policies, coverage, discounts available, and how to get the best deals with the insurance company.
Independent agents work with several insurance companies, so they may not be as knowledgeable about each one and the policies they offer. You may be missing out on unique coverage or discounts because the independent agent was not aware of this.
Less support for the agent
Independent agents usually receive less support than subordinate agents because they are not partners with just one company. The parent company will usually provide resources, training and support to captive agents, while independent agencies will have to use their own resources to run their business, which could affect the stability of the agency.
How can you purchase insurance other than through an independent agent?
If you don’t want to work with an independent agent or agency, there are other ways to get insurance:
- Use a captive agent: If you like a particular insurance company with dependent agents, consider using an agent from that provider instead of an independent agent. Affiliated agents are well versed in the company they represent and should be able to offer you the best insurance rate.
- Purchase directlyA: Whether you go online or by phone, you can also get a quote and purchase insurance directly through the insurance company.
Frequently asked Questions
Are independent agents worth it?
Working with an independent agent usually costs nothing and saves time by allowing the agency quote shop with all the insurance companies he works with. An independent agent can find a better deal than you to meet your insurance needs. Ultimately, you will need to decide if these benefits are worth you.
How do independent insurance agents get paid?
Independent insurance agents receive a commission from the insurance company for placing policies with their company. In case of renewals and changes in the policy, resulting in an increase in premiums, the independent insurance agency will also receive a commission.