Buying insurance coverage can be a stressful experience.
And while most buyers recognize that an insurance agent can be a great guide through the insurance landscape. It’s easy to miss that there are actually two types of property and casualty insurance agents: Captive and Independent Agents.
What Is The Difference Between A Captive Agent and An Independent Agent?
Captive Insurance agents represent only one insurance company. So if you have an increase, they have very limited options to reduce your premium. This usually leads to captive agents decreasing your coverage to bring down your price.
Independent agents, on the other hand, can provide quotes from multiple insurance carriers. This gives the agents the flexibility to explore the market and offer you a highly customized and competitive rate. This advantage helps during your first purchase and when reviewing your policy with your agent at renewal.
So while captive agents are stuck writing for their agents regardless of their financial stability or AM Best* rating, Independent agents have the option to choose which companies would be the best fit for your needs.
*An AM Best rating tells you an insurance company’s financial stability.
How Do Independent Agents Work?
An independent agent can’t just write with any company they want. They must first become appointed with an insurance carrier by following strict rules and guidelines. An independent agent who wants to sell for Progressive must first follow the necessary steps to earn their appointment before they are allowed to quote or sell policies for the company.
After getting their appointments, they can now represent and sell policies on behalf of those companies. The independent agent can now act as the middleman between you and their appointed insurers.
Going through an independent agent saves you the time and effort of checking with each company individually. They can check with a lot of companies in a shorter time than it would take you to check with a handful of them. It also gives you access to quotes that you would not have had access to if you didn’t go through an independent agent.
How Do Independent Agents Create Custom Insurance Packages?
Independent auto and home insurance agents also have the ability to customize client policies to fit their needs with “policy riders.” An agent can use policy riders to create an insurance package that covers all your needs.
Insurance standards can vary between companies. A different company may be a better fit and offer you similar coverage for a lower price. At the same time, one company may be giving you high premiums.
So when you’re deciding on where to buy your insurance, consider the differences between captive and independent agents. Purchasing the right coverage for your needs is an important decision and choosing the right agent is just as important.
If you’d like a quote from the best independent insurance agency in Palm Beach County, Florida call at 561-637-2424.
How To Become An Independent Insurance Agent
To begin your career as an independent agent, you first need to pass the insurance license exam and become a licensed agent.
If you’re looking to become an independent home or auto insurance agent, you typically have two options:
- Open your own insurance agency
- Join an existing insurance agency
If you’re looking to create your own insurance agency, the helpful folks at myfloridacfo.com put together a fantastic guide here.
If you’re interested in joining an existing agency, consider a career at Wiglesworth – Rindom Insurance!