Why deal with an Independent Insurance Agent

Category: Our Blog

Why deal with an Independent Insurance Agent

By Joe T. McKnight

Young Johnston & Associates, Inc.


When you deal with an Independent Insurance Agent you are essentially working with dozens of companies simultaneously to get the best rate and coverage to fill your insurance needs.  The flip side to that, if you deal with an agent that is “captive” with one company, you are accepting offers from one company only.  Your Independent Agent can literally shop for you annually to get the best rate from a number of different companies.

All companies have areas where they tend to have better rates than other companies.  One example of this, some companies tend to have very good rates on Personal Automobile policies with young drivers while others tend to rate higher in the same situation.  As an example, I recently checked the rates on a client 45 years old with a sixteen year old driver on his policy.  We checked the rates with 4 of our major carriers and found the six month premium for this client varied from $847 to $1,900.   We also found that one carrier could not insure the client because they will not cover the teenage driver on one of the vehicles due to their experience with young drivers driving this type of vehicle.

We found that the company with the lowest rate in this case tends to have higher rates than the other three in instances where there are no teenage drivers and the Husband and Wife are over the age of 55.  The same is true with the type of vehicles covered on the policy.  Some companies tend to have higher rates for SUVs and  Pick Up Trucks while having great rates on Sedans and Mini Vans.  In the instance cited above, the company that would not rate the family with the teenager and the excluded vehicle, actually had the best rate on the same vehicles where all drivers are over 55 years old.

Companies tend to follow the same trend in insuring homes.  Some companies have better rates on Brick Homes than on Wood Frame Homes.  Some have better rates in rural areas while some have better rates in metropolitan areas.  In some instances some companies give better rates to people with higher credit scores while others do not penalize for low credit scores or reward for high credit scores.

The same situation exists in Commercial insurance.  We find that some companies have excellent rates for Restaurants but won’t accept Pest Control risks.  On the flip side, there are companies that do a great job with Pest Control risks but have horrible rates on Restaurants.  We could continue all day giving examples of how companies have their “target” markets and markets they want nothing to do with.

In summation, if you deal with an Independent Agent you will have an agent that can fill ALL your insurance needs and do it more effectively.  He or she actually wears dozens of hats and can work with dozens of companies in providing you with the best rates and coverage.  As your situations in life change your Independent Agent will be able to adjust and find markets to deal with these changes.

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