Most consumers know that an insurance agent can be a great asset both when they are shopping for the right insurance policies for them and their family and when they actually experience an insurable incident and need to file a claim. Some consumers may not realize that there are actually two different types of insurance agents - captive agents and independent insurance agents:
- Captive agents are insurance agents who represent and write policies for just one insurance company. If the insurer that they are captive with has subsidiaries, the agent may be able to write policies for those subsidiaries as well, but they cannot write insurance policies for insurance companies outside of that corporate family.
- Independent insurance agents are not held captive to any single insurance company. This means they can write insurance policies with many different, completely unrelated, insurers and they can compare the rates and the policy types of many different insurance companies when helping you find a policy. This freedom gives them the ability to offer you a much wider selection of insurance options than a captive agent might be able to. And that’s not just important when you initially shop for insurance, it can also come into play every year when certain types of policies need to be renewed, because policy renewals offer you another chance to compare rates and policies and make sure the one you renew still fits your needs.
An independent agent cannot automatically sell the insurance policies of any insurer. An agent must be licensed and appointed with an insurer before they can sell their product. That means that if you ask an independent agent to give you the details about a certain policy you saw Company A advertise during a television campaign, they may not be able to if they are not already licensed and appointed with that insurer. However, it is relatively easy for an independent agent to become appointed with another insurer, and your agent might be open to doing so if you want a policy that they can’t offer you.
An independent agent isn’t just helpful in finding a variety of affordable premium rates for you; they can also help find the best combination of insurance policy benefits. For example:
Be sure to consider the differences between the captive and independent insurance agents when choosing the agent that you want to buy insurance with. The decision to buy an insurance policy is an important one, and the choice of an agent can be as important a part of the process as picking the policy itself.
- A captive agent is stuck with one insurer whether they have a great rating or a bad rating through insurance rating company A.M. Best. An independent agent can avoid selling policies from financially unstable and poorly rated company.
- There are many different riders and types of policies that an insurer can offer. Independent agents have a better opportunity to find a policy with riders that suit your needs.
- Independent insurance agents are often involved in helping their clients get a claim check after an insurable incident. As such, they often know which companies make the claims process easy and pay quickly and which might be a little more difficult to navigate.
- Underwriting standards can differ by insurance company which can make certain insurers a better fit. As an example, let’s think about life insurance. Some insurers consider everyone who has inhaled any tobacco product over the past two years to be a smoker, and charges them smoking rates. Some insurance companies, however, consider the occasional cigar smoker to be a non-smoker for purposes of premiums. These underwriting differences between companies don’t just affect your premiums, they can make the different between a policy being approved or declined.
HomeStar Insurance Services is an independent agent specializing in Kankakee auto insurance among others. Contact us for a quote today at (815) 468-8763.