Personal Finance Essentials
Working with Agents and Brokers
When buying any type of property and casualty insurance, you have a choice of who to work with: a captive agent or an independent agent.
Understanding the difference will help you make a better decision.
Captive Agents vs. Independent Agents
Captive agents are employees of a single insurance company. They represent only that carrier exclusively – just as a Ford dealer sells only Fords. No matter how good a competing policy might be, a captive agent won’t offer it to you. Some of the biggest insurance companies in the country operate through captive agents.
Independent agents, also called brokers, represent multiple carriers – often dozens. Because they’re not tied to one company, they are free to shop the market and find the policy that best fits your needs at the most competitive price. Brokers do the comparison shopping for you, which means you don’t have to contact each carrier individually.
Your best approach is to either work with one independent broker – who will shop multiple carriers on your behalf – or contact multiple captive agents to compare quotes from their respective companies. Since each captive agent can only offer you one carrier’s products, getting competitive options requires talking to several of them.