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.

Your Guide to Landlord Insurance

The Importance of Landlord Insurance

The idea of taking out landlord insurance may seem daunting at first, but considering the benefits, it is usually well worth the investment. While it may not be a legal requirement, having landlord insurance could help you save from catastrophic losses that may happen when managing a property, such as a tornado or fire. Without insurance, you would have to pay the entire cost of rebuilding the property if the worst were to happen. However, with landlord insurance, you would only have to pay a small deductible, and the policy can be customized to add additional coverage for other events like vandalism or theft.

Types of Rental Properties Covered

It is important to note that, while landlord insurance applies to long-term rentals over 30 days, if you plan to do short-term rentals like Airbnb or VRBO, you will need a commercial, homeshare, or vacation rental policy instead of landlord insurance. This ensures that you are adequately covered for the short-term rental nature of your business.

Now, you might be wondering, what about when you rent to family or even just a single room in your home? In both instances, you should discuss this with your agent to see what options are available for your specific situation. It’s wise to have landlord insurance, regardless of whether you are renting out to strangers or someone you know personally. You might also be able to add a home sharing endorsement on your current homeowners policy. Disclosing that you’re renting out part of your home and having a policy in place that can protect both you and your tenant in case of an accident, damage is important.

Types of Landlord Insurance Policies

When it comes to coverage, landlord insurance offers three types of policies, known as "dwelling policies." The basic DP-1 policy is a very limited coverage policy. The payment amount from this policy would be significantly less than the landlord's cost to repair the damage, and the landlord would have to make up a large difference out of pocket, but the premium will be much lower than other options. The most popular policy is DP-3, which provides comprehensive coverage, while the policy DP-2 offers moderate coverage.

Differences Between Homeowners and Landlord Insurance

There are some key differences between homeowners and landlord insurance policies. For example, while both policies cover building, liability insurance, loss of use/rental income, personal property, medical payments, and other structures, the amount of personal property coverage varies. A homeowner's policy will usually cover up to 50% of the home's insured value, while a landlord policy will often not offer any personal property coverage unless an additional premium is paid to cover appliances and furnishings. It's important to note that personal property coverage under landlord insurance does not protect the tenant's property, as they would need renters insurance for that. Additionally, the homeowner's liability covers you for personal liability that's non-business related, but landlord's liability coverage only applies to losses related to the rental. You would need separate business insurance for general liability protection.

Get Landlord Insurance with Family Union Insurance

When you’re ready to look into landlord insurance, Family Union Insurance is here to help match you with the best coverage for your specific situation. We work with many carriers that provide customizable landlord policies