In general, independent insurance agents sell:
Property insurance (such as homeowners, renters, and auto insurance) Life and health insurance Small business insurance and employee benefit plans Retirement products Non-standard auto insurance such as non-owner policies
How Does an Independent Insurance Agent Work?
Some independent agents work for themselves, selling products from multiple insurance carriers. They may be required to complete company-specific training or apply and get approved to sell a company’s insurance. Usually, the agent needs to prove they have a promising pipeline of customers and are a good fit for sales. Other independent agents work with insurance membership networks or wholesalers, providing carrier access and administrative support. When you request a quote, an independent agent shops for you through various insurance companies. A good agent will provide side-by-side pricing and coverage options, so you can see the pros and cons and compare pricing between insurers. Independent agents may also be able to access carriers that the average shopper can’t access online. For example, the average person can’t access Chubb insurance online and must contact an agent to get a quote. Once you buy your policy, the insurer pays a commission to the independent insurance agent. Agent commissions typically are comparable, no matter which insurance company you choose.
What’s the Difference Between Captive, Direct Sales, and Independent Insurance Agents?
In addition to buying insurance from an independent insurance agent, you can also buy from a captive agent, or from a direct sales agent at the insurance company. Here’s a look at the differences between the three types of agents:
Pros and Cons of Independent Insurance Agents
Pros Explained
More choices for convenient shopping: Independent insurance agents may sell a range of coverages (health, auto, RV, commercial) from many different insurers, which can streamline your shopping process without the need to gather multiple quotes via websites or phone representatives. Local knowledge and support: An independent agent is often a resident and local business in your community, so they know your area and potential hazards. You can typically stay with your agent for life. An independent agent can be a good choice if you want to support a local business. Customized service: An independent agent will expect to have a conversation about your specific needs and living situation. As a result, they may be more equipped to find discounts or better coverage that more precisely suits your requirements. Good for complex insurance needs: If you have a DUI on your record, multiple homes in different states, a small business, or high-net-worth assets, an independent agent may be able to find you coverage more efficiently than you would on your own.
Cons Explained
Not all insurers are available: Independent agents can only represent companies they’re approved to sell. In addition, some insurance companies only make sales through employees or captive agents, so an independent agent can’t offer you options from all insurers. For example, an independent agent may not be able to sell you coverage from State Farm, USAA, or Amica, nor online insurance brands like Lemonade. May not be able to provide immediate coverage: An independent agent may not be a good fit if you need coverage immediately—say, in the next 10 minutes—and don’t have time to have an agent-customer conversation, determine your coverage needs, and wait for the agent to research your options.
Ask the insurance agent directly: “Do you work with multiple insurance companies, or just [company X]? How many carriers do you represent?“Look for website or advertising wording that describes them as an “independent agent.” Review their record with your state licensing agency and see how many insurance companies they represent.
