Why Choose an Independent Insurance Agency?

  Independent verses Captive

There are two main kinds of insurance agents – independent and captive.  Independent agents are contracted with many insurance companies and can offer quotes and services from all of them.  On the other hand, captives are tied to one or few insurance companies and generally cannot offer the products of another.

An example may help illustrate:  Suppose you go to a local realtor to purchase a home.  You want a realtor that will look at all homes in the area that fit your criteria.  That is an independent agent.  Now suppose another realtor only shows homes he or his real estate company is selling.  That is a captive agent.

  The Best Choice

When shopping for insurance coverage, your two main considerations are a) product, and b) price.  First, does the insurance product meet your needs?  If not, you don’t want it at any price.  Once suitable products have been identified, prices can be compared.  This is a simplified example, but it affects your choice of insurance agents through motive.

An independent insurance agent doesn’t care which one of their insurance companies gets your business.  They want the client to have the best solution and allow the insurance companies to compete for it.  Competition keeps all parties in line.  In this manner, their focus can be placed on serving the client, making recommendations, and explaining the differences between products so that you can make an informed decision.

Captive agents are owned by the insurance companies in one way or another.  They are either employees of the companies or are otherwise bound by contract to only offer certain brands of insurance.  This can be an attractive business model since captive agents need to learn fewer products and work with fewer information/tracking/distribution systems.  They receive a high degree of support from their insurance company and can focus their attention elsewhere.  Many of the large, national insurance brands you see on television are a form of captive agent.

However, with only one wrench in their toolbox, it may not be the one you need.  What if your insurance need calls for a hammer instead?  “Sorry, don’t have one of those,” they may say.  “Maybe you could whack it with this wrench.”

  Insurance Shopping

So how do you shop for insurance for your home, auto, or business?  Some would suggest approaching several of the larger national captives and request quotes.  You would then be the one who compares the quotes, ensures they meet your needs, and that no gaps in coverage exist.

Bankers Insurance suggests an alternative.  Approach a single independent insurance agent, have them shop your insurance with their companies, and allow them to present the best solutions.  They are your advocate, advising you as to any differences or gaps in coverage.

  How to Choose an Independent Insurance Agent

  1. Local:  Though not necessary, a local independent agent has the advantage of being familiar with your area.  For example, this article is being writing from the Belle Haven, VA branch of Bankers Insurance.  On one side of us lies the vastness of the Atlantic Ocean.  On the other is the Chesapeake Bay.  In our area, the fact that we are a coastal community is a big deal.  However, we know which insurance companies are willing to insure various exposures in this area, and this knowledge serves our clients well.  In the same way, your area is unique and a local independent agent can serve it best.
  2. Service:  Ensure your agent has a strong reputation for service.  As one of our clients once put it, “I went with you because of your reputation.  When I have an accident, I want someone standing next to me, not behind me.”
  3. Size:  With independent agents, size can matter.  The larger the agency, the more insurance companies they will have at their disposal, and therefore the more choices they can provide.  They will also have more leverage with these insurance companies that they can ply to their client’s benefit.  There is a balance, however.  Too large and you may not get the personal service you desire.  Bankers Insurance has purposefully structured itself to provide strong local service.