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Benefits of independent insurance agents

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Purchasing insurance can be overwhelming when factoring in all the information needed and understanding policy coverages, limits and exclusions. While you can buy your insurance directly from the insurance company or use a captive agent, there is another option: an independent agent.

There are pros and cons to using either of these three methods to buy auto, home, business, life and health insurance. Consider the difference between a captive vs independent agent, and if you should purchase insurance on your own directly through a company.

What is an independent insurance agent?

An independent agent works with multiple insurance companies to offer an entire suite of insurance products to meet consumer needs. Captive agents work with just one insurance company, offering only the products offered by that specific company.

According to a 2018 Agency Universe Study by the Independent Insurance Agents & Brokers of America, Inc. (IIABA), there are approximately 36,500 independent insurance agencies in the United States. The IIABA has partnered with 47 insurance companies across the country, which independent insurance agents can access through their network. If an insurance company has the Trusted Choice logo, it is represented by independent agencies.

What are the advantages of independent insurance agents?

There are several advantages to working with independent insurance agents vs captive agents.

Multiple quotes from different companies

One of the best benefits to working with an independent insurance agency is having them shop for insurance quotes for you. With access to multiple companies, the independent insurance agent can check rates with several companies at once.

You only have to provide your household information once, which saves you time. Independent insurance agents want to provide you with the best insurance rate so you will choose them, so it may save you more money than shopping on your own or working with a captive agent.

Agent can stay with you if you switch providers

When your policy comes up for renewal, your agent will know. An independent agent can find out about an insurance increase and shop for better rates to help you determine if you should stay with the same company or switch.

Even if you switch insurance carriers, you can stay with the same insurance agent. This can allow you to build a relationship with your independent insurance agent no matter what company you choose for your insurance policies.

Personalized customer service

While captive agents can also provide personalized customer service, independent insurance agents will work hard to keep your business so you do not go to another agency. This means answering questions about rates, coverages and claims or filing claims on your behalf. If there is an issue with your coverage or claim, you can depend on your independent insurance agent to help resolve your problem.

Your best interests

On top of personalized customer service, an independent agent is not bound by the same rules and restrictions as captive agents, so they can use their knowledge of companies and policies to steer you in the right direction. Most independent insurance agents work strictly on commission, which means they get paid a percentage of the premium amount for your insurance. It is in an agent’s best interest to keep their clients happy.

Smaller insurance companies

Independent insurance agencies typically work with small- to mid-size insurance companies, though they do work with some of the larger companies like Progressive and Nationwide. An independent agent may present you with an insurance quote from an unfamiliar company but one that still meets your needs and offers the right insurance 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 drawbacks.

Knowledge of policies

One benefit of working with a captive agent is they are usually experts on the company they represent. This means they know the policy types, coverages, available discounts and how to get you the best deal with the insurance company.

Independent agents work with multiple insurance companies, so they may not be as knowledgeable about each one and their policy offerings. You could miss out on a unique coverage or discount because the independent agent wasn’t aware of it.

Less support for the agent

Independent agents usually receive less support than captive agents because they are not partnered with just one company. The parent company will usually provide resources, training and support to captive agents, whereas independent agencies will have to use their own resources to run their business, which can 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 purchase insurance:

  • Use a captive agent: If you like a particular insurance company with captive agents, consider using an agent from that provider instead of an independent agent. Captive agents are well versed in the company they represent, and should be able to get you the best rate for insurance.
  • Purchase directly: Whether you go online or over the phone, you can also get quotes and purchase insurance directly through the insurance company.

Frequently asked questions

Are independent agents worth it?

Working with an independent agent usually does not cost anything and can save time by allowing the agency to shop for quotes with all the insurance companies it works with. An independent agent may be able to find a better deal for your insurance needs than you can. Ultimately, you will need to decide if these advantages are worth it for you.

How do independent insurance agents get paid?

Independent insurance agents get paid a commission by the insurance company for placing policies with their company. Renewals and policy changes resulting in a premium increase will also provide a commission to the independent insurance agency.

Written by
Mandy Sleight
Insurance Contributor
Mandy Sleight has been a licensed insurance agent since 2005. She has three years of experience writing for insurance websites such as Bankrate, MoneyGeek and The Simple Dollar. Mandy writes about auto, homeowners, renters, life insurance, disability and supplemental insurance products.
Edited by
Loans Editor, Former Insurance Editor