Let’s talk about the types of insurance agents out there. No matter what part of the industry we go over, there are two main types of Insurance Agents:
Captive vs. Independent
Here is why it matters:
- Captive agents work exclusively for one or a group of insurance companies, which they represent. Captive agents cannot offer you anything that is not a part of their company’s portfolio. Even if it represents better value. They will try to help you to the best extent possible, but they do have limitations. Some amazing agencies offer great products, and their agents are excited to represent those products. While other agencies might not have access to some of the best rated insurers and their agents get stuck dealing with sub-par products at higher prices.
- Independent agents work on their own, without a “mothership” agency controlling their moves. On one hand, it allows them to sign independent agreements with the insurers of their choice, so they can provide the best value to their clients. On the other, now that they are working on their own, they may not have access to some of the best insurers. This is because the best and the largest insurers prefer to work with large and established agencies that generate consistent and proven business.
So, its a Catch-22 for both types.
Every agent would love to be independent and provide the Best Service to their clients, but they are usually forced in “Captivity” because of the high overhead costs of running their own agency and not having the support of a larger organization. So, no matter how altruistic are the intentions of the agent and how much they want to offer THE BEST OF THER BEST choices to the client, it’s not often possible to achieve.
Key Point to Remember:
Different agents will have access to different offers and options, so you should ALWAYS compare insurance providers and the products side by side.
Check out our other articles for the main points you should know about insurance BEFORE discussing it with the agent.
Every active insurance agent must:
- Have a currently active license in the state(s) where they operate
- Have an National Producer Number (NPN)
To renew the license, insurance agents must:
- Take state-required and approved Continuing Education courses, heavily concentrating on Ethics
- Pay renewal fee in all states where the license was active