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Independent Agents versus Captive Agents

Independent Agents versus Captive Agents

Independent Agents versus Captive Agents

Independent Insurance Agents are your best bet for getting quality service at an affordable price – period.

Independent Agents are not tied down to one insurance carrier. This means that they have a wide range of products that can fit your needs. This is what separates Independent Insurance Agents from big corporate insurance companies.

A good analogy I saw in another post is when it comes to buying a car. If you go to a specific dealership, the salesman is going to show and tell only HIS products that he has available. He isn’t going to tell you that the same specifications you are looking for can be found in another car at another dealership for a much cheaper price.

The same can be said for insurance agents who work for corporate companies. When you speak to agents who work for these big companies like State Farm, Farmers, Geico, etc., you are speaking to someone who is only limited to offering and selling you their products and no others. That is their job, and their contract, as an employee to that company.

So the problem here is that when you speak to these types of insurance agents, you aren’t getting a fair, biased observation. You aren’t getting the best possible deal you can get. They are trying to sell you the more expensive car instead of looking at all of the same types of cars that can be available at a much cheaper price.

Lets break down the different types of agents and how they affect the outcome of getting insurance.

Captive Agents

A captive agent is an insurance agent who only works for one insurance company (State Farm, Geico, Allstate). 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 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.

The parent company may push its captive agents to sell certain policies or meet certain sales quotas. This causes agents to sell the product that best meets their needs (quota) instead of the client’s needs.

Big insurance companies will pay the agent a commission to assist the customer with their policy. This is a much cheaper method for the companies like State Farm to distribute their insurance policies. They think, why pay someone a huge salary with benefits when you can pay someone a couple hundred dollars per year?

Insurance Representatives

An insurance representative is someone who works for a company typically in a call center environment. Again, their goal is to not only sell you insurance but to sell you their companies insurance. Unlike agents, you may never speak to this person again once they have completed their sale.

Typically the reps are paid a small salary with incentives when making a sale. This means that there will be little customer service and they will deploy high pressure tactics on someone in order to close the deal. The window of opportunity to sell insurance usually means this will be a 15-20 minute phone call then they move on to the next call. These reps are also bound by call center metrics they are required to meet which will diminish the quality service you can get from them.

In some cases, the insurance representative may not even be authorized or licensed to sell you insurance depending on what company they work for. In some companies, these ‘insurance reps’ are there to provide customer service to the agent’s clients in the event that the agent’s office is closed (holiday, emergency, weekends). They will notate on the accounts any changes or requests and have the agent or an agent staff member contact the customer when they are available.

Independent Agents

An independent agent sells insurance policies provided by several different insurance companies rather than a single insurance company. An independent agent receives commissions for the policies that he or she sells, and is not considered an employee of a specific insurance company.

Independent agents, unlike captive agents, have access to multiple companies and carriers. This gives them the ability to look around and provide you with the best possible deal.

This also means they have access to a wide range of products. If a company like State Farm is denying you coverage based on your age, weight, or health, then the independent agent can look around and find a product to suit your needs and provide you with coverage.

Furthermore, an independent agent is not monitored or pressured by ‘big brother’ into pushing certain products on you. You get a fair and more objective look at everything that is available to you. They are also not bound by corporate contracts. This means you get to decide versus the agent making the decisions based on his service agreement.

Independent agents also have a great understanding of the market and where to locate the best possible deals for you since they have such a wide range of products and information. Why call around to different insurance companies looking for a good deal when you can have an independent agent do the job for you?


In conclusion there are good and bad agents in all sectors of this industry. I speak from personal and professional experience having worked in the insurance industry for many years now when I say that independent agents have the best tools at their disposal to provide you with not only great customer service but affordable products.

I just know that if I were buying a car, I would want to go to a dealership like CarMax who sells all brands, makes, models. A company who is not bound by selling just a specific car but someone who provides you with a wide range of prices and products.

Questions? Leave a comment below!


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