What Is a Captive Agent?

Last Updated on August 6, 2021

One of the most popular ways to purchase car insurance is to go through an agent. There are two different types of insurance agents – captive agents and independent agents. When shopping for your insurance policy, it’s important to understand what type of agent you are working with and how they can help you. Here’s what you need to know about working with a captive insurance agent.

captive agent

What Are Captive and Independent Insurance Agents?

Captive insurance agents work exclusively for one insurance company. They have extensive knowledge of the products that their company offers, but cannot sell products from other insurance companies. In addition to selling insurance products, captive insurance agents help their customers by making their monthly payments and filing claims. These insurance agents are usually full-time employees of their insurance companies.

Independent insurance agents, on the other hand, work with many different insurance companies and sell a wide variety of products. They typically do not receive a salary from any specific insurance company, but instead, work on commission.

If you are interested in becoming an auto insurance agent, read our guide on how to do so, here.

What Are the Advantages of Working With a Captive Insurance Agent?

There are a number of benefits to shopping with a captive insurance agent. If you already know which insurance company you want to shop with, a captive agent can be very helpful. They are deeply versed in the different types of products that their company offers, as well as any discounts and other policy information you may need to know about. They can really take the time to help you find the policy that is the best fit for your needs.

Another advantage of working with a captive insurance agent is that they can continue to help you once you purchase a policy. If you need to renew or change your policy, they can guide you through the process. They can also help you with filing claims if you do experience a car crash or any other issues with your vehicle. Many people prefer to have an ongoing relationship with an agent they trust, and a captive agent is the best way to do this.

What Are the Disadvantages of Working With a Captive Agent?

There are also some disadvantages to using a captive agent to purchase your insurance policy. Captive agents can only sell you products from one insurance company, which means that you could end up missing out on products from other companies that could be a good fit for your needs. To deal with this issue, try talking to insurance agents from several different companies to get an idea of which one might be the right fit for you. Once you have a better idea of your options, you can work with a captive insurance agent to find the right policy for your needs.

Another key disadvantage of working with a captive insurance agent is that they may have certain sales quotas they need to hit. Because of this, they may try to upsell you on products that you don’t necessarily need. Most professional insurance agents will not do this, regardless of any sales quotas they need to hit. If you are going to be using a captive agent to purchase your car insurance, make sure they have your best interests in mind and are committed to helping you find the policy that makes the most sense for your needs.

What Are the Alternatives to Using a Captive Agent?

If you cannot find a captive agent to help you with your insurance needs, consider using an independent insurance agent instead. Independent agents are less biased and will be able to show you a broader range of insurance products from many different companies. They also may be able to help you find local insurance providers or specialty providers that you wouldn’t be able to find on your own. It’s important to note that independent insurance agents still work on commission, so you will have to watch out for upselling. Independent insurance agents also may not have as much in-depth knowledge of each individual insurance policy, because they do not work for the insurer itself.

Another alternative to using a captive agent is buying your policy directly. Many people prefer to cut out the middleman and buy their insurance policies on their own. The advantage of this is that you can browse policies online and make a decision more quickly. Many companies that offer direct-to-consumer insurance policies are also slightly cheaper than companies that use agents. However, if you purchase your insurance policy on your own, you won’t have an agent to help you navigate the shopping process. This means you might miss out on discounts or add-ons that could be beneficial for you. Buying an insurance policy on your own also means you’ll have to go through your insurer’s call center to file a claim, instead of going through your agent.

How Can I Shop for Car Insurance Efficiently?

When shopping for car insurance, the first thing to do is determine what type of policy you need. Everyone is legally required to carry liability insurance, but most drivers will want additional collision and comprehensive coverage. Depending on your vehicle and how much you drive, you may want other add-ons as well.

Every car insurance company has its own process for calculating car insurance prices. This means that your premiums could vary widely between companies for the same type of coverage. Once you’ve determined what type of coverage you need, get quotes from several different car insurance companies, and compare your options. Ask insurance agents about potential discounts, as these can help you save a significant amount of money. Shopping around is key to finding the best policy for your needs.

There are advantages and disadvantages to working with a captive agent to purchase your car insurance. Ultimately, the best decision for you comes down to the type of car insurance you need and the companies you are interested in, as well as the level of customer service that you prefer.

James Shaffer
James Shaffer James Shaffer is a writer for InsurancePanda.com and a well-seasoned auto insurance industry veteran. He has a deep knowledge of insurance rules and regulations and is passionate about helping drivers save money on auto insurance. He is responsible for researching and writing about anything auto insurance-related. He holds a bachelor's degree from Bentley University and his work has been quoted by NBC News, CNN, and The Washington Post.
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