Independent vs. Captive Insurance Agents: What You Need to Know

Brett Benningfield
Brett Benningfield

Insurance agents play a huge part in many policyholder’s insurance journeys, acting as a bridge between the provider and you. Agents can help make sense of what coverage best fits you and your unique situation, which can be very helpful since insurance is not a “one size fits all” industry. 

Whether you’re in the market for auto, life, health, or homeowner’s insurance, unless you buy your plan directly from the company, chances are you’ll interact with an agent in some capacity. But what you may not know is that not all agents work the same way. 

The main distinction is between captive agents and independent agents, and there can be key differences in your experience depending on who you work with. Both types of agent provide different experiences when buying insurance. Understanding the difference can help you make an informed purchasing decision based on your unique insurance needs.

What to Expect with Captive Agents

Captive agents are representatives of a singular provider, like you would think of an agent for State Farm or Nationwide. They are called captive because they are beholden to, and can only sell products related to the company they are representing. The agent is also just one part of the process, mainly the consumer-facing part, with other departments within the company managing claims, customer service, and day-to-day business operations. A majority of agents start in a captive role, due to a relatively high barrier of entry that independent selling requires.

“With higher startup costs and more service work, it’s much harder to launch a career as an independent insurance agent and that’s why most insurance agents start in the captive model,” says Jeff Root, a former captive agent who now runs his own insurance resource website.

Captive agents employed by a branded agency are likely to be your point of contact for insurance products, if you get your insurance through an agent. However, one common criticism of captive agents is how their hands are essentially tied to their provider. But you shouldn’t feel that captive agents are providing a diminished service just because they can only sell one provider; that is just how their role is structured. That being said, for many, captive agents are providing a needed service, and some shoppers prefer a more brand-centric approach. Many are comfortable insuring themselves with a trusted company with more structure and financial security over an independent agent. 

The experienced insurance buyer might do their own research beforehand, and discern ways to make their policy personal. One of the perks of going with a captive agent means your insurance is tailored to your knowledge of what coverage would best fit you and your assets. Take some time to fill out quote forms, and get ready to compare prices, coverages, and endorsements that fit your desired needs. Once you have picked a provider, an agent of that company will be an expert resource to answer any questions about your policy. With most of the heavy lifting being handled on the customer side, the captive agent becomes a person who helps seal the deal, and complete the sale. 

Going with an Independent Agent

Independent agents represent the opposite end of the insurance spectrum, as they represent multiple providers instead of just one. That means working with an independent agent can give you far more options than a captive agent can, simply by virtue of being able to contract with more companies. Some also view independent brokers as more committed to the coverage rather than the company. 

Independent agents can be quite useful in fields that require more personalized products and coverages, like life, health, or car insurance. Travis Price, an independent agent who focuses on burial insurance, is no stranger to the unique approach necessary to build a policy that provides proper coverage for someone:

“Instead of working for the insurance company, an independent agent can offer multiple carriers to the client. They can also provide the best value for a particular insurance type based on the specialized needs of the client they’re representing.”

– Travis Price, Licensed Insurance Agent, Digital Burial Insurance

This is one of the key differences independent agents are more than happy to point out between their way of doing things and the way captive agents do things; a variety of choice and customization for policyholders. However, that doesn’t mean certain captive agents can’t provide unique coverage options.

“Some captive companies really niche down on a certain subsect of a prospect group. Think of Knights of Columbus Insurance agents. They automatically have a relationship with the Catholic community. Furthermore, they’re also one of 12 companies in the U.S. that still offer a long term care stand-alone insurance policy,” Price says.

Independent agents can also offer expert opinions and guidance when it comes to making an insurance buying decision. The ability to sell multiple insurance products also means these agents are well-versed in various insurance products. This can come in the form of learning about special coverages offered by certain providers or expert advice on lowering your premium. Having a second pair of eyes on a policy can help a new buyer pick a plan that covers all their needs, and can help develop shopper-savvy habits. 

Essentially, independent agents bring more options and choices to the table. If you’ve never purchased, for example, life insurance, an independent agent can guide you through the process from start to finish. You should consider and do your own research though before consulting an independent agent. Even though they are trained and knowledgeable in the industry, the only person who truly knows what’s best for you is you.

Next Steps for You

Knowing the difference between captive and independent agents let’s you make the best choice for your situation. At the end of the day, both options provide different benefits for different buyers. Comparison between companies can be done through both independent and captive agents, and is the most important piece of the insurance process. So don’t skimp out on getting quotes from multiple providers.

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About the Authors

Brett Benningfield is a staff writer for He has spent countless hours researching and writing about insurance and financial services. Joining in November of 2018 Brett has helped Reviews by delivering research and expertise on a variety of topics like insurance, finance, and more.