I have wondered how my agent gets compensated, but I do not see an invoice for their services. Is this something I am responsible for as the consumer?
An independent insurance agent gets compensated by the insurance carrier. The insurance carrier pays the agent a cut of the profit referred to as a commission. You, as the consumer, are not responsible for paying your independent insurance agent unless otherwise stated. Some agency policies are fee-based instead of commission-based, and in this case, they would disclose any fees upfront.
I would really like the expertise that comes with having an independent agent. However, I am concerned that it would increase my insurance premiums.
If you use an independent insurance agent, your premiums will not be impacted. The insurance company pays the agent out of their profit and does not increase your premiums to pay the agent. Because independent insurance carriers do not spend a lot of money on advertising, they can pay agents for a fraction of what it would cost to market themselves. This saves you time and money versus going to a captive or direct market.
I want advice from a trusted advisor that is not biased. I have heard that some agents may have an incentive to oversell or not provide the coverage that is needed because they work for the insurance companies and not me. Is this true?
While it is true that a captive insurance agent does work for the insurance carrier and does what's in the companies best interest, an independent insurance agent does not. An independent agent works on your behalf and is genuinely an unbiased third party. They work with several insurance carriers and can provide you the coverage and pricing you need.
I have heard different things about insurance agents, and I want to make the right decision. Before I jump into working with an agent, can you clarify how they are beneficial?
An independent insurance agent can absolutely save you time and money. They save you time by having the ability to market your coverage to dozens of carriers instead of having to do that yourself. An independent agent saves you money by have a variety of coverage and rate options to fit within your budget.
I have heard that there is a difference when selecting an insurance agent. Can you explain what an independent agent is exactly?
There are two most commonly known insurance agents, independents and captives. A captive agent works for one insurance company, is employed by that insurance company, and works on behalf of the carrier. An independent agent works on behalf of the consumer, has dozens of carrier options, and is paid a commission based on each sale. Independent agents will give you the best coverage for a competitive price.
I am a business owner and I want to work with an independent agent, but I am concerned that there might be fees involved to compensate. Does my business pay an independent agent?
The insurance company pays an independent insurance agent. More specifically, the independent agent receives a cut of the commissions from each sale. The insurance companies can do this because they do not spend the high dollars on marketing as captive or direct markets would.