Independent insurance agents are those who do not work for a particular insurance company but can instead sell policies from multiple companies. By comparison, a captive agent works for only one type of insurance company and sells only its policies. Before choosing an agent, consider some of the advantages and drawbacks of working with an independent agent.
Find the Best Policy
One of the advantages of working with an independent insurance agent is that she can help you find the best policy for your needs. Captive agents can only provide you with insurance policies that are sold by the parent company. Independent agents can evaluate your insurance needs and then find a policy that meets those needs. The agent does not have to focus only on the policies of one company and can shop around for you.
Another benefit of working with an independent insurance agent is that they represent you instead of an insurance company. Independent insurance agents look out for your best interests. They do not have to abide by the strict rules that come with being a captive agent and they can help you instead. If the insurance agent does not like something about a particular company, he can provide you with honest information so as to help you avoid bad policies.
Lesser-Known Insurance Companies
One of the potential issues of working with an independent insurance agent is that he may try to sell you a policy from a company that you are not familiar with. Most of the major insurance companies on the market prefer captive agents and may not work with independent agents as frequently. The companies that are available to independent insurance agents are smaller and customers may not be comfortable with them. If you are willing to work with smaller insurance companies, this may not be an issue.
Independent insurance agents also receive less support from insurance companies since they are not affiliated with a particular company. By comparison, captive agents often receive assistance from their parent company. They can receive training and resources that help the insurance agent succeed. With a lack of support, the independent agent must use his own resources to stay in business. In some cases, this leads independent agents to go out of business or experience other issues. This can provide you with less stability in your insurance situation.
- Insure Me: Captive Agents Versus Non-Captive Agents: Finding Your Niche
- Consumer Financial Protection Bureau. "What Happens When I File an Insurance Claim?" Accessed March 22, 2020.
- Insurance Information Institute. "Background On: Buying Insurance." Accessed March 22, 2020.
- The Midwest Insurance Agency Alliance. "Captive Agents Vs. Independent Agents." Accessed March 22, 2020.
- The Independent Insurance Agents & Brokers of America. "How to Start an Independent Agency." Accessed March 22, 2020.
- Agent for the Future. "Demonstrating the Value of IAs to Millennial Insurance Consumers." Accessed March 22, 2020.
Luke Arthur has been writing professionally since 2004 on a number of different subjects. In addition to writing informative articles, he published a book, "Modern Day Parables," in 2008. Arthur holds a Bachelor of Science in business from Missouri State University.