How an Independent Insurance Agency Works

Independent insurance agents are one of the 3 avenues to getting home, auto, and business insurance. But the differences can be hard to perceive. This video breaks down your options.

Here are some highlights:

The 3 access points to home, auto, and business insurance:

1. Online/800 Number
Go out and get your own insurance policies using a web portal or calling a hotline

2. Captive Agent
A local branch of a large insurance company. The term “captive” means the local representative works for the company.

3. Independent Agent
A small business that provides access to multiple insurance companies and advice about which company and coverage is best for you.

Pros & Cons of Each:

SPEED:
Generally, the fastest way to get an insurance quote is through direct access to an online company. Their systems are automated and can give you a quote immediately. No advice about how good your policy is but fast.

LOCAL:
Here both Captive and Independent Agents should have you covered. You can walk into their office, meet face to face, and talk through your insurance options.

QUALITY:
When it comes to the best companies, high quality coverage, and well-rounded advice, independent agents have every motivation to be the best option. They aren’t tied to one company so their advice is much less biased. They work with companies that focus on quality rather than blasting the airways with a billion ads.

PRICE:
It’s important to note that no company or insurance agent can ever claim to have the best price. That’s simply because price is constantly changing. When you’re looking for insurance, it’s a single moment in time. The company that’s the best right then may not be the best in a year.
Having said that, Independent agents have a huge advantage on price for two reason:
1. There is price competition inside the agency
Independent agencies work with multiple companies. So the companies know that they have to bring their best pricing every year to stay relevant. If they can’t, the agency can just move on.

2. Independent agents see the ebb and flow of price
Captive agents see one company all day long. This is the only company they can offer. Independents are motivated to be watching and connect with the companies that are most competitive.

So, What’s an Independent Insurance Agency:
• Access to multiple exclusive insurance companies
• Works for you not the company
• Is motivated by quality and good advice
• Can usually find the best price and coverage
• Helps during claims

[erichepperle]

Subscribed! This is an honest non-salesy video that was very comprehensive in nature. I look forward to watching the auto insurance videos!

[smdservices]

I'm in the process of obtaining my P&C license and have been watching several different videos pertaining to Captive vs Independent. By far this was the best video I have watched. It's very informative and explained in a way that made it very easy to understand. Thanks

[trevin]

This guy is an incredible teacher! Usually I have questions that go unanswered even after watching other videos but after watching this, I had ALL my questions answered. You have a new subscriber!

[joychaudhuri]

Wow! Beautifully explained. Thanks for this amazing video.

[NikoBellaKhouf]

Thank you very much, I've learned a lot here, especially from your responses to questions that people have asked in the comments section.

[tradecreditrisk]

Informative Video on how independent as well as captive agents work.Thanks for sharing the difference between captive and independent agents.

[blacknetworkassociates]

Excellent video Jeremy. Great education on the pros and cons of independents and captives. Keep up the good work

[chocolatebutterfly]

You are awesome. I will be subscribing to your channel

[bijan]

Hi Jeremy,

Will you cover Commercial auto, and property insurance as well please. I would like to learn more about auto, trucking business and medical practices commercial insurance etc..
Thank you in advance
Bijan

[Clank_TTV]

This video really clarified what type of agency i want to pursue now. Thank!

[shermanehylton]

Thank you very much, I need an independent agency to work with.

[larryyu]

Great video - thank you! Can you explain the difference between an FMO and an agency? From what I'm reading it seems like an FMO does the same exact thing as an agency i.e. get contracts, supports agents with back office tasks, provides training, etc.

[amiewassell]

Great video! Any tips on places to take a course online? A lot of them look pretty sketchy. Thanks for the help!

[xxheadshotxx]

How do you work with the other’s compan’s?

[karthikbathal]

Hey thanks for the great info! I was wondering how a new independent agent collects different insurance products they can sell? Where do they search for these insurance products?

[brocho-_xx]

The IRS said Thursday it will be sending settlement offers with terms that are stricter than ones it offered last year under an earlier Micro-captive initiative. The IRS has been focusing on cracking down on certain types of tax avoidance schemes, such as syndicated conservation easements and micro-captive insurance, while also stepping up tax enforcement efforts against holders of digital currencies such as Bitcoin and Ethereum, despite a decreasing number of IRS audits overall in recent years.

The crackdown isn’t entirely new. In 2016, the Treasury Department and the IRS issued Notice 2016-66, which identified certain micro-captive transactions as having the potential for tax avoidance and evasion.

[satriani]

what kind of software an independent agent will be using to get quote and setup ? software for every insurance company they work for or the use only one for all ? thanks

[paulraeburn]

Interesting viewing. Do you disclose what your commission is from various Companies? Personally I would like to understand the independent agents incentives throughout the process.

[sandeepsangha]

Also use independent insurance agents only because of competition and quality, value, price, compaire, advice, advice in claims in insurance .

[fardeenrezaie]

Heyy thanks for the information it was very useful and I am doing HLLQP can I be a independent agent??