There are two types of insurance agents: independent and captive. In this post we will define each and describe the difference between the two and what it means for the consumer.
A captive agent represents one company and only sells insurance through one provider. They are often (but not always) employees of that company and solicit insurance on their behalf.
An independent agent does not work for one company, but rather in a “broker” capacity, representing multiple companies at the same time.
In other words, if you call a captive agent to get an auto or homeowners insurance quote, you will get a rate through that one company. If you call an independent agent, you can often receive a quote through multiple insurance companies at the same time. This allows you the opportunity to truly compare multiple rates with one phone call.
Eric Hurt
Eric Hurt, LUTCF is an independent property/casualty and life insurance broker with SIG Insurance Professionals in Dallas, TX. He entered the insurance industry in 2003, and since then has been recognized numerous times for excellence in the area of sales and customer service. He obtained his Life Underwriter Training Council Fellowship Designation in 2004.
He can be reached directly at (972)490-2327, or via email at eric.hurt@trustsig.com.
Indeed, there is a marked difference between captive and independent. I think it is worth noting that many agents are both. For instance, if one is a Farmer’s agent, then they must quote Farmer’s rates, but only if Farmer’s offers the specific type of coverage sought. If the consumer is searching for a product outside of Farmer’s capability, then that agent then becomes “independent”. It is not as black and white as one would think. Additionally, whether the agent has binding authority, and the level of that authority, can really impact the liability to which an agent or company may be exposed.
JP