Category: Insurance

Independent vs. Captive


One of my most frequently asked questions is: “What is an independent agent?”   Generally, this takes the wind from my sails, as I subconsciously expect everyone to innately know the differences in insurance agency types and realize the benefits of both.  You know, general and riveting everyday knowledge that the public, at large, devotes all their spare time to understanding (heavy sarcasm implied).  In reality, very few people know the difference between an independent agency and a captive agency.  Nor do they want to.  Rather, it’s our job to help you understand the main differences in an easy-to-digest, succinct and interesting manner.  In so doing, you’ll see some of the benefits of what I believe are with the independent agent.

In short, there are two main types of insurance agencies:  Independent and Captives.  This post will give you a brief description and illustrate the benefits of each.

  • Captive Agencies:  Generally speaking, captive agencies are brands that you recognize (think Barm Fureau, Fate Starm,  and Helter, to name a few totally hypothetical, non-copyright-infringing examples).  These agencies are appealing because their brands and logos are easily recognizable. However, the local agent in your home town that represents these companies have few options for you.  For example, if your homeowners insurance dramatically increases, they only have their one company for your coverage.  Therefore, the agent is “captive” to that company; they can only sell that company’s approved product.
  • Independent Agencies:  Independent agencies have options.  Depending on the contracts they’ve acquired (see a short list of our companies here), we have several companies through which to shop your coverage.  AND, WE DO IT FOR YOU!  Give us the necessary info one time and we’ll find the best fit for your coverage and budget.  In the previous example, if your homeowners insurance increases with one of our companies, we have several others to try.  Furthermore, the companies we use are also FINANCIALLY STRONG companies—in short, they pay when you need it.

So what’s the trade off?  For the agent, the main difference is marketing (which really doesn’t benefit you, the consumer).  The big brands spend a lot of money sponsoring major athletic events and advertising during prime television viewing hours.  You recognize their names and logos for a reason; they do a great job at advertising.  (A notable exception is Travelers.  They are usually channeled through Independent agencies but also advertise a lot.  See a great Travelers ad here, just have tissues handy).  For the consumer, YOUR trade off is that you are limited in your options with the captive agent.

Give our list of carriers a view and you’ll see that you may recognize some of those brands too, plus, you’ll still get additional excellent options with us.  Even America’s extremely popular money-saving guru, Dave Ramsey, endorses the independent agent as his #1 money saving tip!  

If you haven’t already, give the independent agent try.  You may be surprised at your number of options.  Remember, it never hurts for US to shop your coverage…