| Types Of Agencies & Agents From time to time you may hear the term Independent Agent or perhaps Captive Agent or even Direct Agent. These terms should be important to you when shopping for insurance. It depicts the abilities of your agent/agency in the market place and how they may transact business. |
| Independent Agent Independent agents are "Self Employed" and choose the Insurance Carriers they represent to serve their clients. They have abilities to shop or move your insurance to other carriers within the structure of their agency. They work in the interests of the customer as they are not employed by an Insurance Company. Some agents claim to be Independent but in fact are Captive or Direct. Captive Agent Captive Agents generally have a contract with a Specific Insurance Company. They generally have a commitment to be exclusive to that company and in most cases cannot represent any other insurance company. Being exclusive to one company limits the ability to competitively shop your coverage for the possibility better rates. The loyalty of the agent would be to obviously favor that company they represent on an exclusive basis. With some exceptions, an Independent Agent generally cannot represent a Captive Company. Examples of a captive agent might be State Farm, Nationwide, Allstate, Farmers and American Family. Direct Agents & Direct Companies Direct Agents are employed by an Insurance Company. Many work at locations that could be thousands of miles from the location they serve. Most, but not all of the transactions handled by Direct Agents are by Telephone, Internet or mail. As a consumer, you may not have any ability to meet any agent in person to transact business or discuss your coverages. You may also speak to a different person each and every time you call for service. Examples of a Direct Agent or Company might be Esurance, GEICO, SafeAuto, 21st Century, Liberty Mutual, AIG Direct and Progressive Direct Do not get confused when making a choice Some insurance companies now offer products through Independent Agents and Direct. In these scenarios, the insurance company usually operates each sector independent of the other. Consumers need to ask " Will I have an appointed and specific Agent?" If the answer is NO, you are probably dealing with a Direct Company/Agent. If the word DIRECT is in the company name, that is a good indicator you will have NO AGENT. |
AP-6701 04/26/2010
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