If you’re like the majority of people researching the best independent insurance agency and the best insurance agent for you and your loved ones, it’s common to have lots of questions. With the expertise of your next agent at the front of your mind, it’s a good idea to weigh the pros and cons of all your options before making a selection.
Perhaps you’ve encountered the term “independent insurance agent” in your search for insurance. The independent insurance agent has a unique role in the process of insuring your home and vehicles.
In this article, we’ll cover all the ins and outs of these agent’s responsibilities, what makes them special, and how to choose one to fit your family’s needs.
What is an Independent Insurance Agent?
Independent insurance agents have been active in the US since 1896. Now, they operate on behalf of 43 insurance companies and there are over 7,000 agents countrywide. But what is an independent insurance agent? To answer that question, we have to first distinguish them from another type.
One of the most common types of insurance agents today is the captive agent. Captive agents are locked in, thus “captive,” to sell for only one insurance company. When you buy insurance from them, you’re essentially buying directly from their provider. If rates change, your agent has to work with those changes.
On the other hand, independent insurance agents can and do, work for multiple insurance companies. Hiring one of these agents means that you’ll receive quotes from many competing companies. You can pick and choose which price and coverage is best for you.
In addition, independent agents often take up an advisory role with their clients. With their licensed background and local presence (they could even be your neighbor), you’ll receive personalized advice on the best coverage for your family at a price you can afford.
How Do Independent Insurance Agencies Operate?
Again, let’s start with captive agents and compare them to the standards and practices of independent insurance agents. Then we can answer what the benefits are of using an independent insurance agent.
Captive agents represent their employer, which is their sole insurance company. These agencies operate by training their agents to expertly sell their products. While it’s true that you’ll benefit from the captive agents’ deep understanding of that company’s products, don’t expect many options.
With an independent insurance company and agent, the business works quite differently. You could even say that they operate in a reverse fashion.
‘Independent’ is the critical word here. Since independent agents aren’t employed by any one company, they are free to compare the rates of several carriers. It’s an unbiased approach because the agent has no allegiance to anyone but you.
The independent agent works for you. They benefit from doing the behind-the-scenes research to keep you up-to-date on policy changes and rate drops. If you decide to move over to another insurance company, you don’t have to lose your agent, unlike with captive agents. On average, independent agents represent between five and eight companies.
Independent agents are licensed professionals. So the benefit of independent insurance agents is they take a consultative approach to looking at all your insurance needs, the process doesn’t just stop at home and auto insurance. This will help them provide changing options for you and your family as your needs grow and change over time.
Pros and Cons of Independent Insurance Agents
Why choose an independent insurance agent? That is a great question. Let’s list the pros and cons of an independent insurance agent vs a captive agent. Every person has their own preferences, after all!
- Independent agents can help you select insurance for all your needs. These agents can serve as your auto, property, umbrella, life, and business insurance agent all in one.
- They deliver a personal service. Living in your neighborhood, giving you a direct line to their office, and offering personalized plans are all benefits.
- You’ll get a trusted advisor along with an insurance agent.
- Their duties call them to be vigilant and stay on top of insurance policy changes.
- Filling out insurance claims is simple thanks to their service-oriented job title.
- They usually can’t help you waive costly policy fees.
- Very little to no flexibility with pricing. With only one company to choose from, captive agents don’t have options.
- May not be able to help provide business coverage for those with a home business or who would prefer to handle their personal and business insurance out of one office
How to Choose the Right Independent Insurance Agents
So now you have made the choice to go with an independent insurance agent. What factors should one look into to help them choose the right one?
It is always a good idea to start with friends and family. Ask around to see who is receiving high-quality, consultative help with their insurance. Or if you are new to an area, a quick online search for “independent agents near me” will help you find someone local. For truly personalized service, it is always a good idea to look for a more local office vs a larger chain.
Like a good friend, you want to choose an agent that is responsive to your needs. Ask for agents who openly offer their direct line and promise less than 24-48-hour answers.
Another one of the benefits of an independent insurance agent is the ability to review your financial standing as it grows. Ask if they offer personalized coverage reviews. If they can present a review of your auto, home, and business insurance, count that as a sign of a quality agent.
You should also ask for a list of the carriers that your preferred independent insurance agent works with. The IIABA keeps a list of all the carriers that your agent is likely to associate with. The IIABA owns the “Trusted Choice” brand which signals that the carrier is legitimate and current.
If you have further questions about independent insurance agents, contact us today and one of our friendly insurance experts will happily answer any questions you may have.