Should You Work With an Independent Insurance Agent?

September 30, 2022

Insurance is an important part of your financial planning. It protects you in those times you didn’t know you’d need help. No one can predict when/if disasters will occur, but if they do, you’ll be glad you had insurance to back you up.

Insurance comes in all shapes and sizes and protects you in many areas of your life including your car, home, and life.

When you shop for insurance, you have a few options. Independent agents and dedicated agents all compete for your attention. Many people prefer an independent agent – here’s why.

What is an Independent Insurance Agent?

An independent insurance agent isn’t affiliated with a specific insurance company. They network with a large number of companies giving you choices. Independent agents earn a commission on any policy they sell you from any company. They are the ‘middle man’ between you and the insurance companies.

The Benefits of Using an Independent Insurance Agent

Independent insurance agents don’t work directly with specific insurance agencies, but there are many benefits including:

Get more choices

Independent agents have the largest selection of insurance options. You aren’t stuck with policies X, Y, and Z from one agency. More options provide a variety of coverage options plus you’ll have a better chance of getting approved. When you work with a dedicated agent, you must fit their ‘mold.’ If you don’t, you won’t qualify for insurance with that company.

Get more advice (unbiased)

Dedicated agents push you to buy their policies. If you don’t, they don’t earn a commission. Their advice may be slightly biased or one-sided. Independent agents, on the other hand, can give more unbiased advice because they have multiple policies they can sell you.

They may be more upfront with you about your needs and what their expert opinion is on the policies available.

Save money

Having multiple policies from multiple companies to look at is the best way to get the lowest prices. You can compare policies side-by-side and see which one offers the most affordable premiums with the coverage you need.

Get help when things aren’t right (billing, claims, etc.)

Your independent agent is an advisor for life. Most advisors work with clients throughout their lifetime, suggesting new policies, answering questions, and even serving as a lifeline for customer support if you’re having billing or claims issues.

One-stop shopping

Filling out multiple applications and dealing with multiple agents isn’t anyone’s idea of fun. With an independent agent, you complete one application and have multiple options available. You can ask for various deductible amounts, insurance coverages, and other options and get an answer from one person. It eliminates confusion and saves you time.

Alternative: Working with a Dedicated Agent

Your alternative to working with an independent agent is working with a dedicated agent. For example, if you apply for insurance with State Farm, you work with an agent who only offers State Farm policies.

You’ll hear about the policies available just from State Farm. If you want to compare policies from Farmers and Progressive, for example, you’ll have to complete an application with each of them and compare the offers yourself.

You don’t get unbiased advice or help choosing a policy. You’ll work with three different agents, each of whom wants you to buy their policy so they’ll push the benefits of one policy versus showing you a wide selection.

The Value of an Independent Insurance Agent

If you want options when shopping for insurance, an independent insurance agent provides the most choices. He’ll show you options from various agencies that you can choose from rather than focusing on policies at one agency.

You may not find policies from the ‘big name’ insurance companies with an insurance broker, but you’ll find policies with different coverage options that dedicated insurance agents offer. Weigh the pros and cons and see what options you have given your situation. It doesn’t cost anything to get insurance quotes, so take your time and see what’s available for you.