I been working with several young couples on their home and car insurance. They have several things in common with each other; they are buying their first home and I’m the first independent insurance agent they’ve ever worked with. In each case, the individual or couple have asked me one of two questions as we completed the applications for their policies; do they pay me for the service I’ve provided or will I be their agent after the policies are written?
This was not the first time I’d been asked this questions. They simply assume there’s something different when they work with an independent agent versus an agent that’s captured, or dedicated, to one company.
The answer to the first question is no, clients do not pay an independent agent for the service they provide, we are paid by the insurance company for the policies we write with them. Once those policies are written, we continue to be their insurance agent. Our role as an insurance agent is to continue to answer questions related to their policies, insurance in general, make changes to their policies when a car is replaced, etc. The relationship continues as long as I’m retained to be a person’s agent.
There are, however, some differences between a captured and an independent agent including:
- Captured insurance typically works with only one carrier such as State Farm, Farmers, Allstate, and Nationwide.
- A captured agent typically is only able to write business with the company they represent. For example, a State Farm agent can only write insurance from State Farm.
- These lines are blurring slightly as insurance companies buy other companies. For instance Farmers Insurance owns Foremost Insurance and 21st Century Insurance.
- In some of these cases, the captured agent is able to write business through the other carriers the company bought, although this is not always the case.
- Independent agents typically represent a broader number of carriers such as Safeco, Travelers, MetLife, State Auto, Kemper, The Hartford, Chubb, and more.
- The increased number of relationships enables me as an independent agent to compare various offerings from each of the companies they represent and find the best value for the client.
- The increased options apply to both personal lines (auto, home, renters, umbrellas, life, etc.), as well as commercial policies for businesses.
I have worked with captured agents and companies when I first became an agent. I never lost sight of the fact that having options enables me to best serve my existing and future clients. Instead of having to fit a client’s specific needs to a policy, I’m able to find the policy that best meets a client’s specific needs. I love that freedom to serve my client’s best interest. With each of the new clients I have been working with, I was able to provide an excellent solution that saved them a significant amount of money and that’s what I call rewarding!
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