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KINGSFORD 801 Pyle Drive Kingsford, MI 49802 Phone: 906-779-1900 Fax: 906-779-1930 Hours: M-F 7:30am-4:00pm
Danielson Insurance Agency Inc, Auto Insurance, Car insurance, Home Insurance
MENOMINEE 2719 10 Street Menominee, MI 49858 Phone: 906-864-9909 Fax: 906-864-9980 Hours: M-Th 9:00am-4:30pm; Friday 9:00am-12:00pm
Danielson Insurance Agency Inc

What’s The Difference Between a Captive Agent, Direct Writer, and an

Independent Agent?

July 6, 2017 by Chad Harrison In our last post we discussed the 3 reasons why you should use an independent insurance agent (you can check that out here).  As a follow up to that post, we thought it would be a good idea to explain the 3 main options you have to choose from when it comes to buying your insurance.  So, without further delay, let’s look at the pro’s and con’s of the Captive Agent, The Direct Writer, and the Independent Agent.

Captive Agents

Examples of: State Farm, Farm Bureau, and Farmers When it comes to insurance, some of the most recognizable names are found in the captive agent sector.  Each of these companies do business slightly different, but for the most part each share a similar list of pro’s and con’s.  Let’s explore some of those features:

Pro’s: 

+ Because a captive agent only has access to the insurance product offered by their company, the amount of product knowledge they have is typically more in depth than that of an independent agent that is dealing with multiple products. + The captive agent’s parent company provides ample amounts of training to ensure that their agents know their product front and back. +  A captive agent will more likely speak to the same group of Underwriters, Claim Specialist, and Billing Clerks due to the fact that they only deal with one company. + Captive agents are a licensed, local presence who benefit from the advertising and marketing done by the parent company.

Con’s:

-  Captive agents typically only have one option of insurance to offer.  If the parent company decides to stop offering a certain option, line of insurance, or the rates increase, the captive agent can only offer what is available through their company.  - When rates do increase, the captive agents best option(s) to stay in your budget is to reduce coverages, raise deductibles, or sell you on the idea of the value of the raised premium. - Lack of flexibility and options could lead to a less client-focused approach to business.

Direct Writer

Examples of:  Geico, Esurance, The General, USAA Direct insurance is also known as “online insurance” and it has actually been around longer than you think.  As people become more and more comfortable with online shopping (thank you Amazon!) these writers have grown in popularity.  Let’s dive into what a direct writer is and how they operate.

Pro’s: 

+ Ease of access to quotes, all you need is your information, internet connection, a computer (help is also available over the phone), and time.  You can complete your insurance while sitting on your couch eating a snack. + Actual people do work for these companies and you have access to them, yes, even licensed agents. + The cost can be less as there is no agent involved in the process. + Technology is your friend (you probably have the app on your phone if you have a direct writer).

Con’s:

- The amount of time it takes to get multiple quotes from various direct writers can add up quickly.  - Insurance is complicated and highly regulated by the states, getting properly insured is more difficult then you think. - You will have access to a licensed agent over the phone but probably never the same one. - All the work of making changes and managing your policies falls on the customer, so does any mistakes or oversights. - There is no local presence or person to speak with face to face in times of need. - Technology doesn’t always work and can become confusing to use.

Independent Agent (in Dickinson County, Michigan)

Examples of:  Danielson Insurance, Simone Insurance, Holmberg General Agency,   Mande Insurance, Miller, Upper Peninsula Insurance Independent agents share many similarities in the fact that they will have access to multiple insurance companies, or appointments, as they are called in the industry.  Each independent agent will share a very similar list of pro’s and con’s as well, let’s review, care to join me? 

Pro’s: 

+ Independent agents are not bound by only one company, which means options, lots of options.  If your current insurance company has a rate increase that has you pulling your hair out, an independent agent can simply look at their other options available to them to see if there is a better fit for you. + Independent agents, like captive agents, are local and licensed in the state(s) they are working in.   If you have questions they are easily accessible for a sit-down meeting or phone call.  You’ll know who your agent is and, if you wish, what they look like. + Independent agents are value seekers for their customers.  If the customer isn’t content with the insurance product they currently have, an independent agent has access to run multiple quotes in minutes (this could take you a long time online on your own) with the software they have in their office. + Independent agents have a wide variety of training available to them from the multiple insurance companies that they represent.

Con’s:

- Options are a good thing but they also bring challenges.  Unlike a captive agent, an independent agent has to be familiar with every carrier they have access to.  Insurance has many moving parts and it can be quite difficult to keep all of the differences separated. - Independent agents have to communicate with a large variety of Underwriters, Claim Representatives, and Billing Clerks, unlike captive agents.  This makes the relationship with these people less connected than maybe what the captive agent could have. - I hesitate to add this because it could be seen as the “cost of doing business” when a professional is handling your account, but there can be an increase to the cost of your coverage due to having an agent represent you.  This would be true for the captive agent as well.  There you have it, a decent comparison of the three major options you have to purchase insurance.  By no means is this comparison meant to be exhaustive but merely informative, and we hope, helps start to answer any questions you might have had.  If you have an insurance related question you would like us to address, please send a message to chad@danielsoninsurance.com, like our Facebook page here, or call us at (906) 779-1900.  
What’s The Difference Between a Captive Agent, Direct Writer, and an Independent Agent?
What’s The Difference Between a Captive Agent, Direct Writer, and an Independent Agent?
Captive Agents
Direct Writer
Independent Agent (in Dickinson County, Michigan)

BLOG Entries:

Understanding Health Insurance Whose Fault is No-Fault? Exploring Why Michigan Insurance Cost So Much. What’s The Difference Between a Captive Agent, Direct Writer, and an Independent Agent? 3 Reasons Why You Should Use an Independent Agent
Copyright © 2017, Danielson Insurance Agency, Inc.  All rights reserved. Website by North CountryWebsite Design.
KINGSFORD 801 Pyle Drive Kingsford, MI 49802 Phone: 906-779-1900 Fax: 906-779-1930 Hours: M-F 7:30am-4:00pm Map & Directions
MENOMINEE 2719 10 Street Menominee, MI 49858 Phone: 906-864-9909 Fax: 906-864-9980 Hours: M-Th 9:00am-4:30pm; Friday 9:00am-12:00pm Map & Directions
Danielson Insurance Agency Inc, Auto Insurance, Car insurance, Home Insurance, House insurance, Motorcycle insurance

What’s The Difference Between a

Captive Agent, Direct Writer, and

an Independent Agent?

July 6, 2017 by Chad Harrison In our last post we discussed the 3 reasons why you should use an independent insurance agent (you can check that out here).  As a follow up to that post, we thought it would be a good idea to explain the 3 main options you have to choose from when it comes to buying your insurance.  So, without further delay, let’s look at the pro’s and con’s of the Captive Agent, The Direct Writer, and the Independent Agent.

Captive Agents

Examples of: State Farm, Farm Bureau, and Farmers When it comes to insurance, some of the most recognizable names are found in the captive agent sector.  Each of these companies do business slightly different, but for the most part each share a similar list of pro’s and con’s.  Let’s explore some of those features:

Pro’s: 

+ Because a captive agent only has access to the insurance product offered by their company, the amount of product knowledge they have is typically more in depth than that of an independent agent that is dealing with multiple products. + The captive agent’s parent company provides ample amounts of training to ensure that their agents know their product front and back. +  A captive agent will more likely speak to the same group of Underwriters, Claim Specialist, and Billing Clerks due to the fact that they only deal with one company. + Captive agents are a licensed, local presence who benefit from the advertising and marketing done by the parent company.

Con’s:

-  Captive agents typically only have one option of insurance to offer.  If the parent company decides to stop offering a certain option, line of insurance, or the rates increase, the captive agent can only offer what is available through their company.  - When rates do increase, the captive agents best option(s) to stay in your budget is to reduce coverages, raise deductibles, or sell you on the idea of the value of the raised premium. - Lack of flexibility and options could lead to a less client-focused approach to business.

Direct Writer

Examples of:  Geico, Esurance, The General, USAA Direct insurance is also known as “online insurance” and it has actually been around longer than you think.  As people become more and more comfortable with online shopping (thank you Amazon!) these writers have grown in popularity.  Let’s dive into what a direct writer is and how they operate.

Pro’s: 

+ Ease of access to quotes, all you need is your information, internet connection, a computer (help is also available over the phone), and time.  You can complete your insurance while sitting on your couch eating a snack. + Actual people do work for these companies and you have access to them, yes, even licensed agents. + The cost can be less as there is no agent involved in the process. + Technology is your friend (you probably have the app on your phone if you have a direct writer).

Con’s:

- The amount of time it takes to get multiple quotes from various direct writers can add up quickly.  - Insurance is complicated and highly regulated by the states, getting properly insured is more difficult then you think. - You will have access to a licensed agent over the phone but probably never the same one. - All the work of making changes and managing your policies falls on the customer, so does any mistakes or oversights. - There is no local presence or person to speak with face to face in times of need. - Technology doesn’t always work and can become confusing to use.

Independent Agent (in Dickinson County,

Michigan)

Examples of:  Danielson Insurance, Simone Insurance, Holmberg General Agency,   Mande Insurance, Miller, Upper Peninsula Insurance Independent agents share many similarities in the fact that they will have access to multiple insurance companies, or appointments, as they are called in the industry.  Each independent agent will share a very similar list of pro’s and con’s as well, let’s review, care to join me? 

Pro’s: 

+ Independent agents are not bound by only one company, which means options, lots of options.  If your current insurance company has a rate increase that has you pulling your hair out, an independent agent can simply look at their other options available to them to see if there is a better fit for you. + Independent agents, like captive agents, are local and licensed in the state(s) they are working in.   If you have questions they are easily accessible for a sit-down meeting or phone call.  You’ll know who your agent is and, if you wish, what they look like. + Independent agents are value seekers for their customers.  If the customer isn’t content with the insurance product they currently have, an independent agent has access to run multiple quotes in minutes (this could take you a long time online on your own) with the software they have in their office. + Independent agents have a wide variety of training available to them from the multiple insurance companies that they represent.

Con’s:

- Options are a good thing but they also bring challenges.  Unlike a captive agent, an independent agent has to be familiar with every carrier they have access to.  Insurance has many moving parts and it can be quite difficult to keep all of the differences separated. - Independent agents have to communicate with a large variety of Underwriters, Claim Representatives, and Billing Clerks, unlike captive agents.  This makes the relationship with these people less connected than maybe what the captive agent could have. - I hesitate to add this because it could be seen as the “cost of doing business” when a professional is handling your account, but there can be an increase to the cost of your coverage due to having an agent represent you.  This would be true for the captive agent as well.  There you have it, a decent comparison of the three major options you have to purchase insurance.  By no means is this comparison meant to be exhaustive but merely informative, and we hope, helps start to answer any questions you might have had.  If you have an insurance related question you would like us to address, please send a message to chad@danielsoninsurance.com, like our Facebook page here, or call us at (906) 779-1900.  
What’s The Difference Between a Captive Agent, Direct Writer, and an Independent Agent?