What is an Independent Insurance Agent? 

Independent insurance agents are licensed insurance agents that contract with independent insurance companies and sell policies for numerous carriers. They can also sell many different products like property and casualty insurance, life insurance, health insurance, disability insurance, and long-term care insurance. Independent agents are paid commission from the carriers they work with, usually anywhere from 10-15 percent of the customer premiums collected.

Independent agents are independent contractors for the insurance companies and not employees. So they can act in the best interest of their clients instead of for the insurance company. Many consumers like this aspect of working with them.

Independent agents have been selling insurance since 1896. There are around 7,100 independent agencies across the U.S. and continues to grow each year. Many independent agents are part of the Independent Insurance Agents and Brokers of America also known as IIABA. This is a good way for independent agents to connect and get any help they may need. This is a very popular way people search for auto insurance through these channels because it gives them so many different pricing and coverage options.

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There are three different ways to purchase auto, property, and health insurance. These ways include using an independent agent, using captive agents, or buying directly via internet. Just like anything else there are pros and cons of all these options. So, a basic understanding of what each offer will go a long way in helping you make the right decision.

Click here to read more about how to find local independent insurance agents

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Captive Agent- Captive agents only work with one insurance provider and is compensated by that company. The pros to working with a captive agent is the service and claims can be a better experience. You may not always pay the cheapest price though because you are only getting one price option compared to hundreds with independent agents. Captive agents usually work for the larger national companies. They sell numerous different products in many cases to make up for not having lots of pricing options. Here are some examples of a captive insurance agent:

• State Farm
• Allstate
• Farmers

Independent Agent- Independent agents are licensed insurance agents that contract with numerous insurance companies to sell policies to the public. They have more flexibility to offer different insurance plans to their potential clients. This flexibility gives independent agents a big advantage. People like working with independent agents because it saves them so much time because the agent will do all the shopping for them. There are some independent insurance agencies who contract with hundreds of different companies. Do you know how long it would take you to get hundreds of quotes by calling all these companies one at a time? It would take forever! This is where the independent agent has their big advantage.
Here are some examples of some independent insurance agencies:

• Amax
• Baja
• Cheapest Auto Insurance
• Auto Insurance Center
• Freeway Insurance
  
  

Click here to read more about how independent insurance agents can review your auto insurance policy

Direct Online Auto Insurance Companies- These are mainly on the online side of auto insurance sales. This is a company that does not appoint any agencies and usually don’t have retail offices but sell their one product online. These are companies like Root that don’t appoint agents and do not work for a national carrier like State Farm.
Here are some examples of direct online auto insurance companies:

• Root
• MetroMile
• Lemonade
• Save Money Car Insurance
  
  

Click here to read more about online auto insurance

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Pros and Cons of Independent Insurance Agents

Receiving a quick quote from multiple insurance carriers at once is one of the great pros of working with independent insurance agencies. The time savings factor is huge here because you only have to provide your information one time. Many of these agencies have a comparative rater that shoots out rates from hundreds of carriers in minutes. This can many times save consumers money just because of the mass number of companies basically bidding for your business. Using an independent agent can be nice due to they in most cases can give you an unbiased opinion because they are not an employee of the company but more of a partnership with them.

Click here to read more about cheap auto insurance quotes from independent agencies

A good insurance agent can be very proactive when it comes to your auto insurance rates. They get a step ahead of any coming rate increases and can move you to another company very easily if the current company raises your rates. Compared to a captive agent can shop you around other companies due to them being contracted with that one carrier only. Customers love when their agent calls them before their bill goes up with lower prices. This helps strengthen the relationship and loyalty between the consumer and the agent. Independent agents give their clients more options.

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Personal customer service is a high priority with most independent agents. Many will even file a claim on your behalf and take care of all your customer service needs. This eliminates the hassle of dealing with 1800 numbers and speaking with a different phone rep every time and those annoying auto attendants. Independent agents can give you good advice on claims and policy coverages so you don’t have to do that research on your own.

Since the independent agent does represent many carriers, it can be a challenge to know all the rules for each separate company. Every company they work with has separate rules and guidelines which can be very challenging. Each carrier can have tough quotas for the agent to meet as far as new business and the quality of business written.

Pros and cons of Captive and Direct Auto Insurance

One of the benefits of purchasing car insurance through a captive agent is you will avoid the extra fees that independent agents usually charge. Captive agents have a great understanding of their product and can meet the customers coverage needs much better. When you do 1 thing all day every day you become very good at it compared to doing 100 things every day, sometimes you can just be average at all of them instead great at one of them. The captive to have to go along with the rate increases of their carrier and usually don’t have a way to lower the price for the customer.

Click here to watch more about the importance an annual auto insurance checkup from an independent agent

The captive agent is paid by the carrier they represent. Sometimes this is salary and other times it is on commission basis. Even though captive agents don’t have multiple companies to shop for their customers they do usually have a large amount of insurance products they offer the customer. Most of them will always try to bundle all the customers insurance assets under one umbrella with them. For example, they like to target someone who owns their home and write their insurance. Then they will try to bundle the autos with that policy for a discount. Then they would try to get the extra stuff like boat, motorcycle, life, and business insurance. This really helps build great customer retention because even if

rates go up a little bit who wants to take the time to switch all those policies to another carrier. Having it all at one place makes great ease of business. The captive agent is known to have very good claims service and walk you through the process.

Click here to read more about how to file a claim on your auto insurance policy

The primary benefit of buying auto insurance directly online is you get quick instant auto insurance. If you are tech savvy and don’t want to talk to people this is a good option for you. Many of these direct online writers have you do everything from starting the policy to turning in a claim all on the APP. But the one challenge is it is very difficult to talk to a human being if you have a problem. Sometimes though the savings can be worth that sacrifice of not being able to talk to someone.

Which Auto Insurance Companies sell through Independent agents?

There are thousands of companies that work through the independent channel. For a more thorough list of carriers visit the IIABA website to see more. Trusted Choice is also a good way to find independent insurance agents and companies. They partner with IIABA for agents to advertise on. Here is their website Trustedchoice.com

Click here to read about how auto insurance companies set their prices

• 
  Travelers
• American Strategic Insurance
• Auto-Owners Insurance
• Chubb
• Cincinnati Insurance Company
• Mercury
• Colorado Casualty Insurance Co.
• EMC Insurance Companies
• Frankenmuth Insurance
• General Casualty Insurance
• Grange Insurance
• The Hanover Insurance Group
• The Hartford Insurance
• Integrity Insurance
• Ohio Casualty
• American Farmers and Ranchers
• Penn National Insurance
• Progressive
• Safeco
• The Travelers Companies
• The Republic Group
• West Bend Mutual
• Westfield Insurance
• Zurich North America
  Venture
• Quantum
• Republic Group
• Equity
  
  
  

Click here to watch more about how auto insurance companies set their rates

Which Independent Insurance Companies have the lowest rates?

No one company has the cheapest rates for every customer. Each independent insurance carrier has their specific niche that they will have the best rates for. Here are a few scenarios we can give to guide you to the best independent insurance company for your situation.

Nonstandard Auto Insurance Companies- If you have a bad driving record or no previous insurance history contacting a nonstandard auto insurance company will be your best bet. This is an independent auto insurance company that works with local agencies to find hard to place customers with affordable auto insurance.

For instance, if you just had a DUI or are a new driver getting auto insurance for the first time this would be a good option for you. Here are some of the larger nonstandard companies to consider that work in the independent channel:

Click to read more about how to find non standard auto insurance

• 
  Venture
• Falcon
• Quantum
• Save Money Car Insurance
  
  

Click to learn more about high risk auto insurance companies

Nonstandard auto insurance companies also offer some extra kinds of policies that many captive companies cant like non owner car insurance and SR22 insurance. These are special types of endorsements added to an auto policy to cover people who don’t own a car and who have their license suspended.

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Click to read more about SR22 Insurance

Preferred Independent Insurance Agents- An independent insurance agent who specializes in selling preferred policies. This is an agency who would work with companies like Travelers or Mercury and focus on writing home, auto, and business insurance. So, if you are a homeowner and have several vehicles wanting to bundle the policies together then this type of agent would be good for you to consider. Here are some insurance companies that work in the independent channel:

• Mercury
• Travelers
• Safeco
• Hartford
  
  

Click here to read more about how to find the top independent insurance companies

updated: 08/18/2021