Most people differentiate insurance agents by the kind of insurance they specialize in – health insurance agent, auto insurance agent, life insurance agent, and so on. In the insurance industry, however, there is another important way that insurance agents can be classified: captive insurance agents vs. independent insurance agents.
Whether your agent is a captive insurance agent or an independent insurance agent can actually have a pretty big impact on the type of coverage and service you can expect when it comes to your policies. Today, we’ll discuss some of the differences between the two.
Captive Agents
A captive agent is an insurance agent who only works for one insurance company. A captive agent is paid by that one company either with a combination of salary and commissions or with just commissions. He or she may be a full-time employee or an independent contractor, and may be provided with office space and benefits by the employer.
Captive agents typically have in-depth knowledge of their particular company’s insurance products, but cannot help a client who does not need or does not qualify for that company’s products.
For example, a captive agent with Big Company Insurance can only offer coverage, advice, and quotes for insurance policies from Big Company Insurance. So a quote on a policy will only come from that particular company and if you don’t qualify or the rate is higher based on your personal situations, this is still the only policy option that he/she can provide.
Independent Insurance Agents
An independent insurance agent represents several insurance companies. The agent is independent from all the companies he or she sells for, and can therefore in theory evaluate different insurance policies objectively.
Having multiple companies to choose from truly allows the agent to look out for the best interest of the customer. If an existing client’s rates go up, the independent agent is at will to “re-shop” the clients needs in order to present the client several options again.
An independent agent allows the consumer an opportunity to maintain the relationship with an agent they know and trust even if their particular insurance company takes actions that adversely affect the customer. The agent simply places the customer’s policies with another company.
When you go to the ice cream shop they don’t just sell vanilla. Most ice cream shops have dozens of flavors with dozens of toppings available. The aren’t tied to and therefore can only offer butter pecan. Unless they just really like butter pecan.
Why This Matters
Insurance companies across the country offer thousands of different types of policies and coverages. Your personal situation will fit into a great policy with a provider, but it’s important to have the ability to work with any insurance provider that you want, rather than being forced to fit into a policy under one roof.
The agents at Shaefer Insurance Agency in Venice Florida are independent insurance agents, and offer policies from several different great providers. Contact us today for a quote and consultation on your insurance needs, and let us shop your policy to find you the very best options.
