Did you ever wonder what an independent insurance agent is?
Maybe not 🙂
Let see if we can answer it anyway
This may come as a surprise, but insurance is sold in many different ways. The most recognizable way to purchase insurance is through an insurance agent.
But there are actually two different types of insurance agents.
Yep, that’s right. Some agents are captive or exclusive and only sell for one insurance group, and the other sells for many different insurance companies … these are called independent insurance agents.
But what is an independent insurance agent?
Independent insurance agents have been around since 1896, and there are over 7,000 independent insurance agents selling for more than 43 different companies across the United States.
An independent insurance agent, like their captive insurance agent counterparts, are licensed insurance professionals. So in this respect they are just like a captive insurance agent.
The real difference is that the independent insurance agent has opted to create their insurance agency without a direct affiliation with an insurance company. They trade-off the support an insurance company can provide them to broaden their product offering. This makes the products offered by the independent insurance agent broader, and more likely to meet the needs for coverage and price of their prospective policyholders.
This means the same benefit that the independent insurance agent sees as a better product portfolio, is also what makes them better for consumers. And that benefit is choice.
So, the answer to what is an independent insurance agent is simply, an insurance agent that represents several insurance companies, and works for the consumer rather than the insurance company.
Are the insurance companies offered by independent insurance agents any good?
Of course they are. Some of the oldest and most respected insurance companies work with independent insurance agents. Companies like:
- Travelers Insurance
- The Hartford
- MetLife Auto & Home and MetLife Assurance Company
- Progressive Insurance
- Mercury Insurance
- and many, many more.
Sure, an independent insurance agent cannot offer you Allstate, State Farm or Famers Insurance, because these companies are represented by captive insurance agents. Because the captive agent exchanges support for choice, these insurance companies have to advertise to help the captive agent sell insurance policies. But just because an insurance company advertises regularly, doesn’t make them better companies. They have to advertise because they know their agents are at a comparative disadvantage when it comes to the choice an independent insurance agent can offer.
Let’s break this down
Now we know the answer to the question, “what is an independent insurance agent?”
And that independent insurance agents can offer you choice.
You may be wondering which you should choose, a captive insurance agent vs independent insurance agent, or which is better.
The honest answer is that neither agent is better, but are professionals. The choice comes down to how you like to buy insurance. If you want to select based on brand recognition, or you have trust for an agent who is a captive insurance agent, then your choice is made. But if you want real choice, and are looking to shop the market to get options that provide a better value, then an independent insurance agent is the better option for you.