What Is an Independent Insurance Agent?

Most consumers realize that an insurance agent can be a tremendous asset both when they are searching for the right insurance policies for them and their family and when they actually experience an insurable incident and need to file a claim. But what many consumers don’t realize is that there are two different types of insurance agents they might deal with-captive agents and independent insurance agents. Here is a brief description of each type of agent:


  • 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. Hauser Insurance


Just because an agent is independent rather than captive, that doesn’t mean that he or she can immediately 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 insurer 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:


  • 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.
  • 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.
  • A captive agent is stuck with one insurer whether they have a great rating through insurance rating company A.M. Best or a bad rating. An independent agent can avoid selling policies from financially unstable and poorly rated company.

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