When shopping for insurance, what is the difference between an Independent Agent, a Captive Agent, and purchasing directly online? Here is an honest answer on Whiteboard Wednesday with Pablo Beach Insurance.

The topic this month is, what is an independent agent? We’re going to discuss what an independent agent is versus buying direct online, buying from a captive agent, or insuring yourself with a true independent insurance agent. Let’s talk about some differences.

Buying Insurance Directly Online

The first one we’re going to discuss is buying direct online. When you buy direct online, you’re taking the responsibility of being your own insurance agent. Unless you’re licensed, that might be a little bit dangerous. For the most part, direct online purchasing is rate driven. Be careful, because if you live by rate, you’re going to die by rate. And a lot of times people excluded certain coverages that may be needed. Most people don’t know coverages, that’s the problem. The other thing is customer service sucks when you get right down to it, because every time you call a direct line company, you’re going to get a different person, you’ll never speak to the same person, you’ll never speak to your agent, you’ll never speak to anyone that has your best interest at heart.

Let me give you an example. We had someone who was a customer for a long time. They went out and bought a direct online policy. Why? Because it was cheaper. They didn’t compare coverages. They ended up having a claim. It was a big claim. And guess what? They had no coverage. They called me to try to fix their problem, that’s an issue.

Captive Carrier

The next topic is buying from a captive carrier. What’s a captive carrier? For example, State Farm comes to mind, Nationwide comes to mind, these are captive carriers. Actually the captive carriers pulled out of Florida from a property standpoint in 2004, 2005, left everyone high and dry. So let’s talk about the captive people. Basically, a captive agent is either an employee or an independent contractor/employee of a captive carrier. They are hired to sell only one product, that’s that company’s product, and it may not be in best interest for the client or what the client needs. It’s like buying a la carte instead of having an array of coverages or companies to choose from. There’s also pressure on these agents to sell their products from upper management. So it’s a sell, sell, sell, mentality, not doing what’s in best interest of the client’s needs.

And in Florida, what’s happened in recent years, these captive carriers bailed out of the property market, so they went and got contracts with a few different independent companies selling property insurance like Homeowners or Condo, and they’re not even sure who these companies are, know their underwriting guidelines, or know anything financially about them. So I’d be very careful dealing with a captive carrier that’s selling a product that’s on their paper or letterhead that’s really not their product.

Independent Insurance Agent

So let’s talk about the next topic which is an independent agent. That’s who we are, Pablo Beach Insurance. The main thing is we’re not tied to the “mother carrier”. We don’t have sales quotas, trying to make our bosses or the company happy. We’re doing what’s best for you, the client. We can offer various options, it’s more or less like a buffet versus a la carte; buying one company’s product and that’s all they’ve got. For example, we got 20 Homeowner companies. Everyone’s different, everyone has different needs. One carrier isn’t the final answer. That’s what we do, is research those needs for our clients. And we’re face-to-face with our clients. You have a claim, we can deal with you. You have questions about any coverages, we can help you. We’re going to advise you that way. Our best interest is with you, for you, our client. And we pride ourselves on exceptional customer service. How do I know that? It is because we were voted #1 in the 904 three years in a row as the number one agent in the 904 area, Jacksonville, Florida. It’s basically all we have is to serve you the best we can. I hope this helps, let us know if we can be of further assistance, have a great day!


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