Captive vs. Independent Insurance Agents: Understanding Your Options | Family Union Insurance

When you’re in the market for insurance, whether it’s home, auto, or commercial insurance, you typically work with an agent who can help you find a policy that meets your needs. But most people don’t realize that there are two different kinds of insurance agents—captive and independent.

Captive Insurance Agents

Captive insurance agents, as the name suggests, are contractually obligated to work with one insurance company only. This means that they can sell only that insurer’s policies. Captive agents are experts in understanding the different policies available only with the company they’re contracted with. In Missouri, insurance companies such as State Farm, Allstate, and Farmers use captive agents to sell their insurance products. Working with a captive agent tends to be more expensive overall due to additional fees that the insurance company charges.

Independent Agents

Independent agents, on the other hand, partner with various insurance companies of their choosing, selling policies from each provider. For example, an independent agent might contract with Nationwide, Travelers, and Progressive Insurance etc to sell any of their auto and home insurance policies. This means that working with an independent agent will give you more options, which also means a wider price range. Independent agents have in-depth knowledge about numerous carriers, whereas captives only need to learn about one. Additionally, independent agents tend to cost less because they don't have significant additional fees to support a parent company.

Choose the Right Agent for Your Needs

Working with an independent agent also helps you shop around for plans before settling on one. As insurance is a critical component of one's financial plan, it's essential always to choose the right kind of agent. Before choosing an insurance agent, take the time to understand your options and choose the one that works best for you. When you’re ready to have an independent agent shop a variety of carriers for you, reach out to Family Union Insurance.