• Peter C. Ciravolo

Captive vs. Independent Insurance Agents - The Pro's and Con's of Both


Throughout your life there will be many times that you will need to find insurance coverage to protect an asset that you may have. When these situations come up, you will need to consult with an insurance agent. Insurance agents are usually compensated through commissions of insurance products that they sell, thus, it is very important to make sure that you are educated and work with the correct type of insurance agent for your specific needs.


There are 2 main types of insurance agents, captive and independent. Captive insurance agents are contracted to work for one insurance company and thus are incentivized to sell their own products. Independent agents are contracted to work with a variety of insurance companies and sell policies from multiple different carriers. As a consumer, it is important to know the pros and cons of each type of insurance agent.

Captive Agents

Most of the major insurance companies out there have their own captive agents to sell their insurance products. Their agents sell products from their insurance carrier, and all compensation, benefits, and retirement pensions are tied to the agent’s insurance production. In this format, these insurance agents are experts in knowing the different policies available, discounts, and add ons with their specific carrier. Some carriers have special niches, and thus, it is easier to market in these areas for these agents. Let’s not forget though that insurance isn’t a one size fits all game, thus, the more captive agents sell of their one company, the greater the benefits and bonuses.


Example: A Ford car salesman is an expert in all Ford products and will always tell you that Ford is the best car on the planet. Ford works for some, but Ford is not the one size fits all solution for everything.

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Independent Agents

Independent insurance agents are out on their own - they usually market under their own brand, and are more entrepreneurial in spirit as they do not have the backing, systems, or brand recognition of large insurers. There are thousands of insurance carriers out there, and it’s impossible to get contracted with all of them. It’s important to see how many carriers an independent agent offers, and how much experience they have. After all, insurance isn’t a simple business, and it is important that things are done correctly.

Example: Getting your oil change at an independent mechanic is almost always the more affordable way to get your car serviced, but not all independent mechanics are alike, and there are some you want to avoid. Make sure you do your homework and find the right independent agent who has the expertise and experience to get the job done correctly.


Which is better? Captive or Independent Insurance Agents?

The largest benefit of working with a captive agent is that they have extensive product and policy knowledge of their insurance company’s offerings. Captive agents have heavy compliance and support from their insurance carriers, and thus can be trusted. However, working with a captive insurance agent tends to be more expensive.


With independent agents you will have someone who is able to scan the entire insurance market for you to find the best rates and coverages. Not all independent agents are alike as their skills and systems can be spread out and very different. Independent agents usually are less in cost, but it is important to make sure you are with an experienced and vetted independent agent.


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