What Is an Independent Insurance Agent?

(And why you need one,)

What is an Independent Agent

Ever wonder what exactly an independent insurance agent does? Look no further. Addressing the different types of insurance agents and why you need an independent agent will all be covered here. 

Find the best agent match for protecting your assets. Check out TrustedChoice.com and connect with an agent in your area.

The Independent Insurance Agent

Independent insurance agents typically sell a variety of insurance and financial products. Their expertise includes property and casualty insurance, disability insurance, life insurance, health insurance, and long-term or short-term care insurance.

One unique feature that an independent insurance agent possesses is the ability to shop several carrier markets. This will ensure that you get sufficient coverage for the best price in town. 

Where It All Began

Independent insurance agents got their start back in 1896 when a chance meeting occurred on the streets of Denver. Two independent fire insurance agents, Charles Wilson and Robert Brannen, discussed what could be done to give their customers more product selection from more than one carrier. And the Independent Insurance Agents of America (IIAA) was born. It is still the oldest and biggest association of independent insurance agents in the nation.

Wilson and Brennen met with other colleagues to discuss their concerns and devise a solid backing. On September 30, 1896, twenty agents unanimously decided to form the National Association of Local Fire Insurance Agents (NALFIA). Their mission: "to support right principles and use our influence to correct bad practices in fire underwriting."

Independent insurance agents have always been for the consumer. They fought their way through history, taking a stand to make sure you have the products and services needed to protect you and price your insurance adequately. The term trusted adviser never became more true than on that day.

Independent Agent vs. Captive Agent

There is a lot of debate about which type of insurance agent is best to trust your most significant assets with. The difference between the two should be noted.

  • Independent insurance agents: They represent your best interests. Working with multiple carriers, they find you the best coverage and pricing with the ability to shop rates in the future. 
  • Captive Insurance agents: They work for one carrier, and have fewer options for coverage and price. Captive agents have limited products and have to hit specific metrics to keep their jobs, which could compromise your best interests as the consumer.

While some may argue one way or the other, the clear choice would be to have options. The more options you have to choose from, the better decision you will make. With an independent insurance agent, you will have several carrier options that fit your needs and budget-friendly pricing. 

Features & ServicesIndependent Insurance AgentsCaptive Agents
Access to multiple companies and a wide range of products
Easy switching from company to company without hassle
Unbiased and objective advice
Tries to sell and support only their one company
Claims assistance and advocacy
Adjusters are often exclusive to the one company
Policy service from the same person you bought from
To call center

According to A.M. Best, in 2018, captive writers accounted for 51.4% of property and casualty insurance net premiums written, and independent writers accounted for 47.7%.

Which Insurance Companies Are Independent?

Independent insurance agents work with several insurance companies, while captive agents work with one. You can probably guess which are which. However, most consumers don't know the difference.

Top Independent and Captive Insurance Companies

Independent Insurance CompaniesCaptive Insurance Companies
NationwideState Farm
ProgressiveAllstate
TravelersLiberty Mutual
The HartfordFarmers
Auto OwnersAmerican Family

It's the difference between being pigeonholed into one choice and having a variety of options to compare and choose which is right for you.

What Do Independent Agents Sell?

Independent insurance agents represent several different carriers, giving them and you more options. Instead of a one-size-fits-all approach, they can tailor each policy to your specific needs and price range.

In addition, independent agents know the complexities of the insurance market and what laws may apply. Not having an agent will cost you time and expertise that could quite literally save you from financial ruin.

An independent insurance agent is licensed to sell one or all of the following products:

  • Property and casualty insurance: This license means your agent can give you advice about, and sell you, insurance to cover the property you own, like your home, car, and business property. The casualty insurance portion means they can provide liability coverage to protect against legal responsibility for an accident that causes injuries to another person or damage to another person's belongings.
  • Life insurance: The life insurance license gives your agent the ability to give you advice about, and sell you, life insurance products such as term, universal, and permanent life insurance.
  • Health insurance: Health insurance has changed over the years, and having an agent that is knowledgeable and licensed to sell it is essential. The health insurance license will allow just that.

How to Find a Local Independent Insurance Agent 

Finding a local independent agent is the easy part with TrustedChoice.com. They have the best independent insurance agents in your town, and connecting with a local agent is as simple as utilizing the find an agent tool. Having an "in" with the popular kid who knows everyone pays off. Match with an independent agent today and start benefitting from better coverage and the best pricing.

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TrustedChoice.com Article | Reviewed by Candace Jenkins

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