June 24, 2024
Benefits of independent insurance agents


Finding the right car insurance can seem overwhelming. One way to navigate this complexity is by talking with an independent insurance agent. These agents are licensed to sell insurance products from multiple companies instead of just one. An independent insurance agent could lighten the load for people who don’t want to do the legwork of collecting quotes and information from different companies. Bankrate’s insurance experts have put together some helpful information about the potential advantages and disadvantages of using an independent agency to find insurance coverage.


What is an independent insurance agent?

An independent agent represents multiple insurance companies to offer a broader range of insurance products to help meet consumer needs. In addition to auto insurance, independent agents can also help you find life insurance and homeowners insurance. They are also able to offer similar insurance products across a broad range of companies. Meanwhile, captive agents represent just one insurance company, offering only the products offered by that specific company.


The benefits of choosing an independent agent

Before you look for an independent agent to work with, decide if an independent or captive agent is right for you. To help you make an informed decision, we’ll cover the advantages and disadvantages of working with an independent agent.


What are the advantages of independent insurance agents?

There are several potential advantages to working with independent insurance agents vs. captive agents. There are no extra costs when working with an independent agent, and it can save the customer time by allowing the agency to shop for quotes from multiple insurance companies. 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 and other possible advantages are beneficial to you.


Multiple quotes from different companies

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


When working with an independent agent, you only have to provide your pertinent information once, saving yourself time. Independent insurance agents may also know which companies have the qualities you’re looking for, which will also save you time and could potentially save you money.


Agent can stay with you if you switch providers

When your policy comes up for renewal, reach out to your independent agent if you receive a rate increase. They can shop for competitive rates to help you decide if you should stay with the same company or switch.


Even if you switch insurance carriers, you can stay with the same agent. This can allow you to maintain 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 tailored customer service, independent insurance agents may be more motivated to work hard to keep your business. This means answering questions about rates, coverages and claims or filing claims on your behalf. If issues arise with your coverage, you can call on your independent insurance agent to help resolve your problem.


Your best interests

An independent agent has a legal duty to act ethically and put your best interests first. They thoroughly review your individual circumstances and needs before exploring the wide range of options they have access to in order to help find you the best insurer and product for you.


Smaller insurance companies

Independent insurance agencies can work with all types of companies, ranging from smaller regional companies to major national insurers like Progressive and Nationwide. An independent agent may present you with an insurance quote from a smaller, 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 potential advantages to working with an independent insurance agent, there are also some possible drawbacks.


Knowledge of policies

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


Independent agents in insurance represent multiple companies and, therefore, may be stretched a bit thinner in regard to in-depth knowledge.


Less support for the agent

Independent agents don’t have the backing of a large insurer in the same way captive agents do. This may mean having fewer easily accessible resources and being required to be more proactive in finding training and support.


Fewer large insurance companies

Some large well-known companies, like State Farm, do not work with independent agents. Therefore, while independent agents are able to provide products and rates from multiple insurers, they may not have access to specific companies you may be interested in.


Potential conflict of interest

While an independent agent has a legal duty to act in the best interest of their client, there might be a conflict of interest for the agent if one insurance provider pays a higher commission than another. To act ethically, the agent should present the advantages and disadvantages of both providers, regardless of the commission offered.


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 or have other lines of insurance through a specific company and want to bundle coverages, consider using a captive 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 from that company.

Purchase directly: Whether you go online or over the phone, you can also get quotes and purchase insurance directly through the insurance company.

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