|Types Of Agencies & Agents
From time to time you may hear the term Independent Agent or perhaps Captive Agent or even Direct
Agent. These terms should be important to you when shopping for insurance. It depicts the abilities of your
agent/agency in the market place and how they may transact business.
Independent agents are typically "Self Employed" and choose the Insurance Carriers they represent
to serve their clients. They have abilities to shop or move your insurance to other carriers within the
structure of their agency. They work in the interests of the customer as they are not employed by an
Insurance Company. Some agents claim to be Independent but in fact are Captive or Direct.
Captive Agent Or Exclusive Agent
Captive Agents typically have a contract with a Specific Insurance Company. They generally have a
commitment to be exclusive to that company and in most cases is unable, by contract,to represent
any other insurance company. Being exclusive to one company limits the ability to competitively
shop your coverage for the possibility better rates with an alternate insurance carrier. The loyalty of
the agent/agency would be to obviously favor that company they represent on an exclusive basis.
With some exceptions, an Independent Agent generally cannot represent a Captive Company.
Examples of a captive agent might be State Farm, Nationwide, Allstate, Farmers and American Family.
Direct Agents & Direct Companies
Direct Agents are employed by an Insurance Company. Many work at locations that could be
thousands of miles from the location they serve. Most, but not all of the transactions handled by
Direct Agents are by Telephone, Internet, email or mail. As a consumer, you may not have any ability
to meet any agent in person to transact business or discuss your coverages. You may also speak to
a different person each and every time you call for service. Examples of a Direct Agent or Company
might be Esurance, GEICO, SafeAuto, 21st Century "Direct", Liberty Mutual, USAA,
Progressive "Direct" and The General.
Do not get confused when making a choice
Some insurance companies now offer products through Independent Agents and
Direct. In these scenarios, the insurance company usually operates each sector
independent of the other. Consumers need to ask " Will I have an appointed and
specific Agent?" If the answer is NO, you are probably dealing with a Direct
Company/Agent. If the word DIRECT is in the company name, that is a good
indicator you will have NO Specific AGENT.
|Dealing Direct vs Your Local Agent