How can an independent insurance agent help me find the best policy?

Independent insurance agents are people who work with many insurance companies and often sell a wide variety of insurance products. Independent agents are suitable for shopping in the market to find prices and policies that best meet your needs. This is not the same as the prisoner of war or exclusive insurance agents that usually only work on insurance contracts from a particular company and sell them.

“Independent agents place around 62% of all property/cause premiums in the United States and control the commercial line where 87% of premiums are written,” said Mark Friedlander, a spokesman for the Institute of Insurance Information. “Prisoner agents and direct writers hold 35% and 25% respectively.

The use of independent agents evolved as insurance companies diverged from their homeland and needed local experts.

learn more: How does car insurance work? The basics explained.

Independent prisoner agents are both trained to associate clients with insurance contracts that meet their needs. However, no matter what type of insurance agent you choose to work with, each state has different requirements, so you will need to get a license in the state you live in. There is no national insurance licensing system.

Captive and independent agents are equally qualified and licensed to sell a variety of insurance products that may include homeowners, automobiles, living, health and disability insurance, Friedlander said. “Whether an agent is a prisoner or independent, a good agent is entitled to represent the career in which they work,” he added.

learn more: The most common type of car insurance explained

By dealing with independent insurance agents, you can make it easier to compare insurance contracts from various companies in one place.

Independent institutions are often small businesses with a small number of agents and other staff who live in the communities they serve. The number of companies that independent agents work with varying degrees.

National and progressives, for example, work primarily with independent agents.

“While a small, independent agency with one location only represents a handful of airlines, a large agency operating in multiple states could represent more than 20 insurers,” Friedlander explained. “Most local insurance companies are usually represented by independent agents because they are more cost-effective than hiring their own agents.”

The POW insurance agent could be an employee or contractor of the company they represent. You may see the term “dedicated” agent.

Companies such as State Farm, Allstate, and Geico usually use prisoner of war agents.

Some insurance companies have both types of agents working with them, like farmers.

The prisoners and independent agents represent the insurance companies they work with and earn a commission on all insurance contracts they sell. In many cases, prisoner agents also earn salaries and benefit from the insurance company they work for.

Neither type of agent chooses the price for the policy, so don’t expect to negotiate the price. Insurance companies set fees and agents can’t afford it, but can suggest ways to lower the price of your insurance by changing or looking for coverage Auto insurance discount. Both types of agents can bind policies. This means that you can provide coverage proof before the policy is enabled.

Friedlander said, “Independent agents must sign a trustworthy choice code that emphasizes integrity, integrity, ability and hard work, focusing on acting in the best interests of their clients and maintaining confidentiality. Captive agents sign ethics pledges similar to those of their careers.”

Friedlander said all agents must comply with the state’s regulatory ethics codes that they run and which could be sanctioned for violations.

The obvious difference between an independent insurance agent and a prisoner of war insurance agent is the range of insurance they can sell. POW agents are usually limited to those offered by one company.

However, prisoner agents may have a deeper knowledge of the products on sale.

Independent agents may work with small insurers, so those who have insurance due to poor driving records or low credit scores may find that independent agents are better for the various companies that the agents represent.

learn more: What is high-risk car insurance?

Another difference is the committees they earn. Both types of agents earn fees, but committees of independent agents are higher than usual.

According to the Insurance Business, a publication in the insurance sector, the amounts that agents selling auto insurance can make are:

• Independent agent. Independent agents earn around 15% on new policies and 2% to 5% on updates.

• POW agent. The fee rate for prisoner agents is between 5% and 10% of the total premiums in the new policy, and between 2% and 5% for renewals.

Yes, independent insurance agents can bundle insurance from the same company. This usually means a discount. This is important Auto and Home Insurance Bundle Discounts Often, it’s one of the higher discounts you can hook.

When purchasing multiple policies, such as car insurance or home insurance, the advantage of an independent agent is its ability to compare the prices of bundled policies with separate policies. For example, would it be cheaper to get car insurance from Company A or company B’s homeowner insurance, or bundle it up with one insurance company? Independent agents working with multiple companies can understand that for you.

learn more: How a bundle of car and tenant insurance will save you a lot

One of the benefits of working with an independent agent is that if you choose, you may not have to switch agents Change insurance company later.

No matter who sells your policy to you, it’s generally the same to make a point.

“Most property/victim claims are filed directly with the insurance company via mobile app, online portals, or via telephone. Some independent agent carriers must file claims through the agent to their clients,” Friedlander said.

You may not need an agent at all to buy insurance. Many businesses sell their policies directly to consumers online.

Amy Danis and Tim Mani edited this article.