Commercial Business Insurance Agency: Everything You Should Know

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“What does that mean?” This is the very first question comes to a person’s mind while hearing the term independent business insurance company. The best way to describe what an independent insurance agent is is to talk about the three ways to get home auto or business insurance and therefore show you what’s available and what the different options are.

Three Types of Commercial Business Insurance Companies

1- Sign Up Online
You can definitely go online or call an 800 number and get insurance all by yourself. It’s very easy, it’s very quick, and you are on your own in doing so. More and more people are doing that. More and more commercials are being shown for those kinds of companies so that certainly is one way to go about getting your insurance. Some examples of those are companies like Liberty Mutual Insurance or Safe Auto, Basically a lot of the ones you see in commercials are available online or through an 800 number.

2- Captive Insurance Agents
The second is through what’s called captive insurance agents. These are folks that usually have a local branch of a large insurance company. The term captive refers to the fact that those folks work for one specific company. They work for the company, therefore they are captive to that company. They can’t go out and look at other companies, other options. If you’re calling them for insurance they’re going to show you what is available with their insurance company. Some common examples of those are State Farm, Allstate, or Farmers.

Generally, those folks have local spaces you can go to if you want to walk in the door of their agency, shake hanks with an actual human, you can do that. Agents of a captive agency are generally paid a salary. They work for the company, they’re paid a salary. They generally get performance bonuses associated with how many folks they bring in the door as well.

3- Independent Commercial Insurance Agency
An independent agency is an agency that provides access to multiple insurance companies and advises about which one is best for you. Therefore, independent agencies make relationships with multiple companies.

They go out to those companies and say “hey you’re a great company we would love to work with you. Would you like to work with us?” Different agencies work with different amounts of companies but all independent agencies work with multiple companies. The companies have to know going in that if they’re working with independent agents there’s going to be competition in that agency. In a captive agency there’s no competition. The people work for the company, there’s no other companies there. In an independent agency there is competition amongst companies inside that agency.

Because the agency has multiple companies that they’re working with, the companies independent agents work with are different than the captive companies. The most common question is “Can you offer me State Farm or Allstate or Farmers?” The answer is “No”. They have chosen to have their own agents in towns around the country instead of working with independent agencies

So in essence and an independent insurance agent is free to you. The number that is sent to you as the quote, that’s how much your auto, home, or business insurance is going to cost. However a little bit of that money comes back to the agency and that’s how they make their money.

To set up a graphic, let’s break down four different parts. Obviously there’s lots of different things to think about when you’re thinking about which insurance company to work with but here are four examples of the difference between these three options.

Differentiating Three Options by Potential examples

#Speed
Let’s start with speed. You want to get a quote, you need it right now. Well the best option here’s probably online or 800 number. The reason is it’s very automated. You’re going to go online and they’re going pop a number out and if you like it, you’re just going go for it.

#Nearby or Local
As far as local, captive agents and independent agents are generally there locally. So there’s an office you can walk into, shake hands with your agent, sit down and talk about your policies if that’s what you want to do. As far as local goes, captive and independent are your best options.

Assured Quality
Who’s going to provide you with the best quality policies and the best quality companies. Well, in general, the the access point that has the most options is going to give you the best quality because those independent agents have multiple companies they can look at. One of the things independent agents are constantly looking at is the quality of the policy that the companies are providing.