Who Is An Independent Insurance Agent?

Who is an Independent Insurance Agent
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Mutual Benefit has sold its coverage exclusively through independent agents for over 100 years. We’ve seen first-hand how the advice and advocacy of agents benefit policyholders.

An independent agent is an insurance agent that sells insurance policies provided by several insurance carriers, rather than just a single insurance company.

The independent agent acts as a middleman to connect insurance buyers and sellers in order to facilitate a transaction. Independent agents receive commissions for the policies that they sell and are not considered employees of any specific insurance company. 

Their expertise allows them to advise their clients about appropriate amounts of insurance and insurance coverages for their particular needs. Often, independent insurance agents will work with insurance intermediaries, who obtain quotes from multiple insurance providers and pass them off to the independent agent.

Working with an insurance intermediary service allows the independent agent to review many quotes and offer their clients the best policy options available. For their efforts, independent agents are paid a commission (remuneration).

In addition to insurance policies, agents often sell mutual funds, annuities, and products that address wealth management, retirement, and estate planning. The states in which they sell insurance and financial products must license independent agents.

Independent agents have been around since the early to mid-1800s, which eventually led to the creation of the Independent Insurance Agents & Brokers of America, Inc, a trade organization, in 1896.

Today, there are about 36,000 independent insurance agencies in the U.S. There are a number of major trade organizations that support the interests and needs of the independent insurance agent, including Agents For Change, The National Organization of Life and Health Agents (NOLHA), the Independent Insurance Agents & Brokers of America (The Big “I”), and the National Association of Professional Insurance Agents (PIA).


In general, independent insurance agents sell:

  • Property insurance (such as homeowners, renters, and auto insurance)
  • Life and health insurance
  • Small business insurance and employee benefit plans
  • Retirement products
  • Non-standard auto insurance such as non-owner policies

Independent agents are independent contractors for the insurance companies they represent. Several companies may authorize the agent to sell for them, but the agent remains an independent businessperson.

While the agent collects commissions, they do not collect a salary from the companies they represent. On average, independent agents work with thirteen property and casualty and six life and health insurance companies on a regular basis.

Independent agents own and control their accounts, policy records, and renewals. If an independent agent’s contract with a particular insurance company ends, the agent keeps the rights to active accounts and may place them with another insurer. 


Becoming an independent agent requires you to study, complete course hours (set by the state), and pass one or more exams, depending on the types of coverage you wish to sell.

A license allows you to sell different types of insurance or sell policies in different states. Many newly licensed agents work for an established agency to gain experience before starting their own.

Additional education is required as you move forward in your career.


There are two types of insurance agents:

  • Captive agents typically represent only one insurer.
  • Independent insurance agents typically represent more than one insurer.

Both captive and independent agents work on commission and can execute an insurance transaction from start to finish, on a variety of insurance plans.

An independent agent may be contrasted with a captive agent, who can only sell the products of the company they work for.

Competition exists between captive agents and independent agents. Captive agents, who are salaried employees of the insurance company, write a majority of the personal lines business.

However, because of the complexities involved in commercial risks, independent agents capture approximately 80 percent of the commercial lines market. It is having access to multiple markets that gives independent agents a competitive advantage in commercial lines.

Captive agents work for and are paid by one insurance company, either with a combination of salary and commissions or just commissions alone. So a captive insurance agent has the insurance company’s— and often their own— best interest at top of mind, not the customers.

On the other hand, independent insurance agencies employ professionals who don’t work for a particular insurance company, and instead, they work for their clients. Independent insurance agents represent you, not the insurance company. That’s a huge distinction. 

Independent insurance agents, like independent financial advisors, are thought to be able to provide their clients with a wider array of options when it comes to insurance products. They take into account the different coverage needs of the client and select a policy that provides the necessary coverage at a reasonable price.

An insurance agent that sells policies offered exclusively by a single insurance company is referred to as a captive agent. While the policies offered by a captive agent may be less expensive than those offered by an independent agent, it will be difficult for the client to know whether they are getting the best deal if only one option is made available.

Captive agents may show the prices offered by competitors, but they will not be able to offer and sell those policies.

To add to an independent agent’s competition pool, many insurance companies are direct competitors to the agents they appoint. For example, Progressive Insurance spends nearly $300 million a year in advertising directly to the public. Yet, Progressive is the country’s largest writer of private passenger auto insurance through the independent agent distribution channel. 


While independent agents can offer their clients policy options from a variety of different insurers, they may not be considered completely objective. Because the insurance companies pay a commission to the insurance agent when a new policy is sold, the agent may push clients to select policies that provide the agent with a higher commission rate.

Because independent agents are not fully supported by a single insurance company, they are often responsible for generating their own business. They may have to produce their own marketing material and manage their own operations, though they do benefit from the general advertising and marketing done by specific insurance companies.

However, if the independent agent does not sell the policies offered by an insurance company that is conducting a large branding advertising campaign, the benefit will be limited.


This is arguably the most important benefit of working with an independent insurance agent.

Better Customer Service; Responsiveness

The benefits that come with excellent customer service can’t be overstated. It can mean the difference between claims resolved in days rather than weeks (or months), and many independent agencies promise to return calls quickly, some within 24 hours or even less.

Working with a local independent agent usually means you get lighting quick responses to your questions and requests.

So, for example, if you decide to hit the tag agency at your lunch hour, you’re going to be frustrated and inconvenienced if you can’t get your insurance agent to respond quickly to your request for an ID card.

Help Throughout the Claim Process

Independent agencies that are dedicated to a culture of excellent customer service offer help throughout the claim process. Less service-oriented agents believe their job is done and dusted once you’ve filed the claim.  

Faster, More Efficient Insurance Claim Processing

A hands-on independent insurance agent can often resolve a claims issue in a matter of days. They’re involved throughout the process and can translate the often confusing language of insurance for their clients.

Better Communication

Effective communication between the insurance agency, adjuster and client is a key component of excellent customer service. Often, customers complain that some of the big insurance agencies take months to process a claim, and they don’t communicate in the interim so the client doesn’t know the status of a claim.

Additionally, an involved agent has a thorough knowledge of the policies you hold, and what’s covered under them so they can quickly catch mistakes an adjuster may make which could result in a denial of the claim.

Personalized Coverage Reviews

An independent insurance agency will take the time to review coverages with their clients regularly.

Why is this important? Knowing you have sufficient coverage that applies to your specific life and business circumstances provides huge peace of mind.  

For example, an independent agent can review your coverage with you to ensure that your assets are fully protected should the worst occur.

You want to know that your home, your auto, and your family will be able to withstand anything thrown their way. Hoping to plant a seed that will bloom for your family in the future? Your independent agent can guide you.  

An independent agent can go over all of your policies to help you determine whether your existing coverages make sense given your current situation.

Multiple Insurance Carriers Mean More Options

Independent agents have access to a much larger portion of the insurance industry. Independent agents represent many different insurance companies that offer a wide variety of coverage options and price points.

Most on average sell for five to eight different insurance companies. There’s no need for you to accept one quote from one company, and there’s no need for you to spend time filling out many different online applications to get your own quote comparisons.

With their connections and their knowledge of the market, agents can often find a better value for your insurance dollar than you might find searching on your own. Agents do the shopping. You do the saving. They find you the right blend of price, coverage, and service.

Captive agents can only offer one option; they can’t put together custom tailored solutions which often leaves the customer under or overinsured.

Independent agents can often meet all of your insurance needs with the companies they represent, providing auto, home, renter’s, and business coverage. Many offer life and health insurance as well.

Save Money

Independent insurance agents can also offer quotes from multiple insurance companies which can mean big savings for their clients. They’ll look for the best value by finding the optimum combination of price and coverage.

Stay With a Trusted Choice As Your Needs Change

And clients don’t have to change agencies if their insurance and service needs change. So for example, if you live in a rental property and are looking to purchase a home, it’s not going to be a hassle to move from renter’s insurance to home insurance.

You don’t have to worry about the headache of finding and changing over to a new agency if you work with an independent agent that offers a wide variety of coverages.

If you decide to go into business for yourself and you’re already working with an independent agent that’s proven to be responsive, knowledgeable, and honest, you can feel good about purchasing business insurance from someone you already trust.

You’re The Priority

With a variety of products available and a personal knowledge of your life and business circumstances, an independent insurance agent can offer customized solutions, not one-size-fits-all, quick fixes that don’t provide adequate and appropriate coverage for you.

An independent agent is concerned with the quality of the product being offered, and whether its value is in alignment with its cost given your unique circumstances.

A customer-focused agent with experience and specialized knowledge can help you understand how a particular insurance product works and why it might be a good fit for you. 

They are Licensed Experts

Independents can explain the complexities of insurance in simple terms, helping you make smart decisions.

They make a career out of assessing their customers’ insurance needs and matching them with the insurance carrier best equipped to meet those needs at a price the customer can afford. Think about it.

While you might research wording for wills on the Internet, you’ll likely go to an attorney to ensure that the document is drawn up correctly.

Why wouldn’t you seek the advice of a licensed insurance professional to be certain that your home, your auto, or your business is properly protected?

They are Personal Advisers 

Agents not only find you competitive pricing, they make sure you are adequately covered. Working with you face-to-face, your agent becomes your personal adviser, taking the time to listen to you and understand your individual needs.

They know it’s not just about finding a price you can afford; it’s also about making certain you are appropriately covered so that you don’t end up insurance-poor if you do suffer a loss.

They are consultants for a lifetime

Independent agents periodically review your coverage. They are there to help you through all the changes in your life, whether you’re going from renting an apartment to buying a home, starting a business, getting married, renovating your home, adding a teen driver to your auto policy, or looking to cover that retirement condo.


It is often beneficial for a customer to work with an independent agent because they may be able to quickly research multiple policies and rates across various companies.



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