Independent Agent vs Captive Agent: What’s the Difference?

captive agentInsurance is one of those necessary, but headache-producing topics that most people prefer to avoid.

That’s why going to an insurance agent is such a handy way of handling your insurance needs. A good insurance agent will listen to your needs and recommend the coverage and policies that will work for you and your budget.

But did you know there are two kinds of insurance agents?

They are the captive agent and the independent agent. Let’s look at what each type of agent is and help you decide which type you should choose to hire.

Captive Agent

A captive insurance agent works exclusively for one company. The agent is, in a way, held “captive” by the company they work for. They can only offer you products and services offered by that company.

This can be good when it comes to specialization. A captive agent will know all the ins and outs of their company’s offerings and can tailor a plan to fit your needs.

However, they are limited to whatever their company offers. There may be another company out there that offers a better rate for the same amount of insurance coverage, but they won’t be able to offer it to you.

Another potential downside is that the agent may be motivated by the company’s incentives to recommend coverages you don’t need. They usually need to make sales quotas and that will always be in the back of their mind. That means that their best interest won’t always align with yours. When the two are in conflict, whose best interest do you think they’ll choose?

Independent Agent

An independent insurance agent, on the other hand, works independently. They tend to manage their own overhead and pay their own expenses. Thus, they are not beholden to any one insurance company.

Instead, they work with several companies and offer all the products and plans associated with those companies. They get paid by earning a commission on whatever plan they sell.

When you choose an independent agent, they will assess your needs and offer you the best plans for your situation. Instead of reducing coverage to offer you a better rate like a captive agent may have to do, they’ll simply look elsewhere to find you a better deal.

If your rate goes up, you can ask an independent agent to look around again. They will be able to find you the company that now offers a better deal and can easily switch providers. A captive agent is tied to the company they work for and doesn’t have the same flexibility.

Which One Is Right For You?

Simply learning the difference between the two types of agents probably already answered this question. Why go to a captive agent when an independent agent has so much more freedom and flexibility?

Plus, an independent agent wins when you win, so they will have your best interest in mind at all times, not their own quotas.

To get started finding the right quote for you, feel free to contact us here or call/text us at (281) 487-9686. We’re happy to help!

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