D. Gilson is a writer and author of essays, poetry, and scholarship that explore the relationship between popular culture, literature, sexuality, and memoir. His latest book is Jesus Freak, with Will Stockton, part of Bloomsbury’s 33 1/3 Series. His other books include I Will Say This Exactly One Time and Crush. His first chapbook, Catch & Release, won the 2012 Robin Becker Prize from Seve...

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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Reviewed by Jeffrey Johnson
Insurance Lawyer

UPDATED: Jul 19, 2021

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A good agent can be an asset.
A good agent can be an asset. (image by prospectequities.com)

Before the advent of television and the Internet, if one wanted to purchase car insurance, they’d likely do so from an insurance agent in a traditional brick and mortar business. And even now, with multiple ways to purchase a policy available to all, many still choose the level of service and personal touch of dealing directly with an agent. Here’s what you should know about insurance agents.

Two Types of Agent: Captive and Independent 

While there are thousands of insurance agents out there, all clamoring for a shot at your business, they can be broken down into two broad categories. They will be either a captive agent or an independent agent. What’s the difference between the two?

  • Captive agents – Despite the ominous sounding name, these insurance agents aren’t being held captive, nor will they hold you captive. The term comes from the way they do business, and that these agents only represent a single insurance company. In most cases, these agents are actually employees of the company they represent. These insurance companies are normally very large and offer a wide array of services and coverages.
  • Independent agents – Unlike their captive counterparts, independent agents don’t represent a single company, nor are they beholden to any one insurance company. These agents offer multiple services from a variety of different insurance companies. Some of the companies may offer multiple types of insurance, but often they don’t – it really depends on the size of the company, and which products the agent is licensed to sell.

Both captive and independent insurance agents may work for your situation. In general, we prefer independent agents because they can offer a variety of quotes, since they represent multiple companies. If you’re dealing with a captive agent, they can only quote your car insurance rate from the single company they are employed by.

How much does dealing with an insurance agent cost?

Buying a car policy through an insurance agent shouldn’t technically cost you anything. You don’t pay for an agent’s time nor attention when you’re dealing with them on selecting a policy to buy, or when they’re providing you with other services.

But insurance agents are paid, so where does that money come from? Again, this is a question that varies, based on what company the agent is selling the policy for, and if they’re a captive or independent agent.

Captive agents may work simply on salary, whereas independent agents may be paid on a commission-only basis. In some cases, and agent may be paid a small salary and commission. If an agent represents multiple companies, then they are paid different commissions based on which company the policy is purchased from.

While the commission is a set percentage of any policy you buy, it may or may not add cost to your purchase. Some companies offer lower rates if you purchase from them directly, since there would be no commission, whereas others sell at the same price no matter how you purchase your policy. Regardless of the type of agent or what company you purchase a policy from, you should never be asked to pay any additional fees directly to your insurance agent.

If I purchased my auto policy from an agent, who do I talk to?

As with many questions, the answer to this question can be summed up with “it depends.” Namely, the answer will vary based on the company you chose to purchase your car insurance from. If you purchased your policy without an agent, be that over the Internet or the telephone, then you most likely do not have an agent. Some of the larger insurers will assign an agent for customers like this, but many do not.

If you’ve purchased your insurance through a real person, in a brick and mortar office, then this individual is your insurance agent and you’ll normally be expected to deal and work directly through them.

I purchased through an agent, but they’re not helping me. What do I do?

Bad customer service can make an situation unpleasant, and car insurance is no different. If your agent isn’t providing adequate service, your first step should be to discuss the situation frankly and honestly with your agent. Address the issues you don’t think they’re helping you with.

After this conversation, if your agent is still unwilling to change their stance, you’ll need to move higher up the ladder. If your agent has a supervisor at their agency, ask to speak with them; if that fails, contact the insurance company directly. Explain your situation and they should be able to help you resolve it.