Independent insurance agents represent several insurers and can sell you a policy from any of the companies they work with. Independent agencies and agents work a little differently. While agents usually sell auto insurance policies, licensed independent agents can sell any type of insurance, including renters, homeowners, and life insurance. In the case of auto and home policies, captive insurance agents earn between 5% and 10% of the total premiums paid during the first year, while independent agents receive around of 15%.
Commission rates for renewals range from 2% to 15%, with an average of between 2% and 5%, regardless of the type of agent. In the next section, we'll discuss the difference between captive and independent insurance agents. Many captive insurance agents work as full-time salaried employees for insurance companies. However, depending on their contract, they may receive commissions in addition to their fixed salary.
Salaried insurance agents only charge the amount they have agreed with the insurer or their agency for that given year. However, their performance still depends on the number of policies they can sell. If you're ready to start or improve your career in the insurance industry, consider obtaining the necessary licenses, deepening your knowledge of different insurance products, and considering specializing in innovative areas, such as DPC, to truly stand out. Simply put, independent agents act as intermediaries between you, the buyer, and the different insurance providers.
Insurance agents usually make money through commissions, but there are several other ways they can earn income. However, many business and personal line customers will not want to consider changing insurance agents until their policy is renewed annually, unless they have a problem with the service. Most newly licensed agents work for an established agency to gain experience before becoming independent agents. Becoming an independent insurance agent requires several steps, such as taking courses (established by your state) and passing exams to obtain the license (depending on the type of insurance you want to sell).In short, independent agents need to consider several types of lucrative insurance to increase their profitability and professional satisfaction.
Independent insurance agents have the freedom to work with multiple insurance companies, allowing them to offer customers a wider product selection than captive agents, who are limited to the policies of a single insurer. For example, many insurance agents want customers to know that they can't get retroactive coverage because of something that has already happened. Just as independent agents are insurance clients' best ally when it comes to finding affordable and quality coverage, the Big “I” is an independent agency's best ally in managing a successful and well-informed operation. The biggest benefit of working with an independent agent is pretty obvious: you work with one agent to get quotes from several insurance companies.
