Traditionally, insurance sales have been carried out by agents. They opened shops on the high streets, put their name up on the front and started trading and doing business. Most of them came from the area and had relations that it was easier for them to be trusted and build a bond between the agent and policyholder and a bridge back to the companies they represent.
Seeing that this is a good way of building trust and being offered as the preferred choice (by the agent) insurance companies started poring money in to build a network of agents across the country. These networks still go strong despite the Internet. People like the idea of being taken care of by someone they can talk face to face, rather than dealing with someone else each time.
These agents can sell wide range of policies for health, life, business, home and auto insurance. It doesn’t take long for a good outlet to find a specialist agent for each line to operate from the same office. In a way, you start dealing with the agent instead of the insurance company. They deal with getting quotes, placing you on risk and submitting and following up your claims.
The Real Divide between Tied and Independent Agents
Now, you may think that an agent is an agent and why should you care about the differences. However, the divide is so sharp in terms of implications that you would probably want to know how. There are a few well-known insurance agency networks in the United States of America like Allstate and Farmers. And usually they go along with the name of the agent. So, you know that that particular agent works with that particular company. This is all fine and provides you a good access to policies sold by the company.
However, how about having one agent that can tell you about the products of twenty different companies and let you choose. Wouldn’t it allow you access to a much larger market and as a result to better policies and prices? Those agents exist and they are called independent insurance brokers. They are so well established with a national body and regulations to govern their practices.
This independence aspect of their operation makes the job more difficult for them but they can cope well with this task thanks to computers and the Internet networks. They can get you quotes from at least ten different companies in minutes and tell you about the coverage on offer with prices. So, next time you are considering seeing an agent think about this divide and consider if you would prefer an independent or tied insurance agent.