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How does an independent insurance agency work?

An independent agent is an individual licensed and authorized to sell different insurance companies' products to consumers. Because they’re not bound to one insurance company, they may furnish car insurance quotes from multiple insurance providers at once, providing an array of coverage options, services and prices. 

Working with an independent insurance agent may come with some downsides, which we detail below.

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What is an independent insurance agent?

There are three ways to obtain insurance:

  • From a captive agent who represents a single insurance company
  • Online (direct)
  • Via an independent agent

Big insurance companies are more likely to work directly with their customers because customers are already aware of their products via advertising campaigns. Allstate, State Farm and Farmers each utilize captive agents to help sell products and service clients.

Independent agencies and agents work a little differently. Although the agents most commonly sell car insurance policies, licensed independent agents can sell any form of insurance, including renters, homeowners and life insurance.

The biggest benefit of working with an independent agent is fairly obvious — you work with one agent to get quotes from multiple insurance companies.

How independent insurance agencies operate

An independent agent has a set relationship with an insurance company in which they’re trained and authorized to sell the company's products.

The agent's commission varies based on how they acquire and conduct their business, but their compensation usually comes via commission — much like a captive agent.

Depending on your state, vehicle, driving history and company, your premiums may vary significantly. An independent agent can show you prices from different companies — giving you the power to choose.

If you have a bad driving record or are a non-standard insurance customer, an independent agent could be your best option for finding affordable car insurance. Non-standard customers typically have poor driving records, low credit scores or other factors that indicate risk. Many smaller and non-standard companies work with independent insurance agents to find customers.

Reasons not to work with an independent insurance agent

One downside of working with an independent agency is that many top insurance companies don’t work with them. You’re more likely to see companies with smaller marketing budgets working with independent agents than GEICO, Progressive or State Farm. Companies like State Farm and Progressive don’t need independent agents to sell their products — their brand name and advertising budget does it for them.

However, this doesn’t mean you’re getting the best rate if you shop with a big company for your insurance needs. The only way to know you’re getting affordable auto insurance is to shop around. Using our comparison model, you can get quotes from insurance companies large and small. Enter your ZIP code below to get started.

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It's also worth avoiding independent insurance agencies that don’t provide you with quotes, instead displaying ads and selling your personal information. Here at The Zebra, we do not sell your information — we use your ZIP code and driving information to generate personalized car insurance quotes.

Is an independent insurance agency right for you?

If it’s a free service and the agency or company is not going to sell your information, working with an independent agency is a great way to get an idea of your insurance needs. If you’re a non-standard customer, i.e., a driver with a poor driving history or low credit score, you’re more likely to find coverage via an independent agent than via a big company alone. 

The Zebra works with an array of insurance companies to find a wide variety of coverage options at multiple price points. Our team of in-house agents can walk you through your insurance coverage possibilities to help you make the right choice.

About The Zebra

The Zebra is not an insurance company. We publish data-backed, expert-reviewed resources to help consumers make more informed insurance decisions.

  • The Zebra’s insurance content is written and reviewed for accuracy by licensed insurance agents.
  • The Zebra’s insurance content is not subject to review or alteration by insurance companies or partners.
  • The Zebra’s editorial team operates independently of the company’s partnerships and commercialization interests, publishing unbiased information for consumer benefit.
  • The auto insurance rates published on The Zebra’s pages are based on a comprehensive analysis of car insurance pricing data, evaluating more than 83 million insurance rates from across the United States.