Insurance agents can be either a captive agent or an independent agent. An independent agent can write business with more than one company, earns a commission on each policy they sell and are able to sell insurance in more than one state. An independent insurance agent is generally local and is there to service the policies they sell.
An independent insurance agent is quite similar to their captive agent counterparts except that an independent insurance agent can sell insurance products from many insurers. Typically, an independent insurance agent writes business with ten to twenty or more insurance companies through which they have a contract. An independent insurance agent is the most common type of agent that is going to be found locally. Although, there are agents from some of the major carriers in some of the larger or more populated areas. Independent agents typically have three to five top insurance companies that they like to place business.
An independent insurance agent just like their captive counterparts get a percentage from every policy that they sell. The percentage for each policy can depend on many things such as the type of policy sold as well as the amount of the premium. The more policies an independent agent sells can result in a bonus from the insurer at the end of the year. The typical commission is two percent of the premium per policy per year. This is why it is important for an agent to provide continuing service to their customers because they get a commission every year at the policy’s renewal. A renewal commission makes up a good portion of an agent’s income.
An independent insurance agent is able to sell insurance products in more than one state providing that they have a license from each state they wan to do business. Many insurers operate on a regional or national basis which makes writing business in multiple states worthwhile. This is especially true for retired folks that travel to warmer states during the winter months. An independent agent that writes in a destination state for retired people can provide auto insurance for when they more their during the winter months. An independent agent can only write business for an insurer that has been approved to offers insurance products in other states.
An independent insurance agent is usually local to a specific area or city. As a result they can gain a good reputation for their service and ability to attention provided to their customers. An independent agent that is local is relatively easy to see and talk to if a customer has a question or concern about their policy.