An independent insurance agent is commonly referred to as a “broker.” Agents are typically local and are licensed and authorized to sell insurance on behalf of multiple insurance companies.
Independent agents often have access to dozens of different companies, allowing them to match you with coverage that successfully meets your particular needs. If you’re in the market for auto insurance, for example, an independent agent will shop for the best options and deals available to you from the pool of auto insurance companies they’ve partnered with. You will then receive quotes from different carriers, giving you pricing, service, and coverage options. And then YOU get to choose which option you like the best!
Basically, an independent insurance agent will find out exactly what you’re looking for and then do the heavy lifting for you, making calls, acquiring quotes, and offering expert advice when you have questions or concerns. But the benefits don’t end there. Keep reading to learn how independent agents are making their mark on the world—for good reason.
How Independent Agencies Work
An independent agency will partner (via contract) with an insurance company they feel is a good fit for their customer base. They will first be trained and then authorized to sell products and services for this company. Independent agents may represent many (sometimes even 30–50) different companies at a time. When a client decides to buy insurance while working with an independent agent, the agent will act as an intermediary between them and the insurance company.
Independent Insurance Agents vs. Captive Agents
A captive agent works for a single insurance company, often a large national provider like Farmers or State Farm. The insurance provider trains its own agents, and agents only push and sell their company’s products—direct to consumers.
Independent Agents vs. Direct Writers
A direct writer sells insurance products direct to consumers for a single insurance company. The largest direct writers are GEICO and Progressive. Direct writers sell their products mainly online and over the phone.
Pros & Cons of Working with an Independent Insurance Agent
One of the greatest advantages of working with a good independent agent is that he or she is on YOUR side—truly. Independent agents should have your best interests in mind when sifting through different insurance companies, quotes, and coverages. Since independent agents are working for you and not an insurance company, they will be much more inclined to deliver impartial information than a captive agent would.
Additionally, an independent agent will provide you with more than one option, giving you the power to choose which company—if any—you’d like to buy insurance from. If you want several quotes fast, by only giving out your information one time, all you have to do is ask.
Good independent agents will alert you if your insurance rate is about to rise and it’s time to look for another plan or switch carriers. They can also file claims for you or offer tips before you file a claim yourself. Independent agents are known for their top-notch customer service, which includes giving helpful advice, responding promptly, and genuinely caring about their clients. If you build a good relationship with your agent, you can continue working with him or her long term, even if you switch carriers!
Finally, independent agencies can work with you if you have non-standard conditions that makes it harder to find affordable insurance, such as a low credit score, if you smoke or chew tobacco, if you need high-risk coverage, or if you’re a senior citizen. Your agent will act as your advocate and speak with insurance companies on your behalf.
In a nutshell, you’ll have someone on your team who is knowledgeable and experienced and will go to bat for you to find the best coverage at the best price for your particular needs.
Some larger corporations don’t work with independent agents; they use their own advertising and branding to build their customer base. If you already know you want to buy insurance from a big-name company and don’t want to shop around for other options, don’t work with an independent agent.
Captive agents and direct writers have in-depth knowledge of a single carrier’s policies since they’re only selling their products and services. Conversely, independent agents who work with multiple carriers may have more general knowledge of the companies they represent; this, of course, depends on each individual agent, their experience, and their drive to learn and research.
How an Independent Insurance Agent Makes Money
As opposed to captive agents and direct writers—many of whom are salaried and earn a commission on top—most independent agents earn their income strictly from commissions. These commissions are paid out of premiums that insurance companies charge policyholders.
To find a top-rated independent insurance agent near you, ask people you trust for referrals, interview prospective agents and check licensing and credentials.
Coverage Direct is an independent agency that offers customers the convenience they would expect from a direct writer while still providing personalized, service and coverage advice. We pride ourselves on putting our customers first—always.
If you have any questions about our services, a claim, your policy, or anything else, we’d love to hear from you. Contact us online, via email, or directly by phone, and we’ll be in touch to handle your request as soon as possible!