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January 28, 2015


Captive (Exclusive) vs. Independent Insurance agencies?


Jason Tower and Vicki Tolbert spent several years as exclusive agents for a well-known insurance company. Both of us faced the frustration and challenges of not always being able to serve our customers best interests because we only had a single insurance product line to offer. We resigned from our agencies and joined to form Tolbert Tower Insurance Agency in Brownsburg, Indiana. We now have multiple insurance provider partners to choose from in order to serve our customers and their families as well as possible.


We wrote this to help customers better understand the difference, and the implications, for themselves when choosing between these two different types of insurance agencies.


What is a captive or exclusive agency? If you have ever bought insurance from or seen an ad for State Farm, Allstate, Geico, Farmers, or American Family, just to name a few, you are describing insurance companies which sell their insurance products via an agent who works exclusively for them. This means their agents are only allowed to sell their single sponsoring insurance company's products.


What is an Independent Agency? This describes insurance agencies which can provide products from multiple insurance providers for their customers.


What are the differences and advantages?


Both types of agencies sell the same types of products. They include insurance protection for cars, homes, life, personal liability, and for many other insurable losses.


Insurance agencies which have an exclusive arrangement with one single insurance company have excellent products. The problem with being a customer of a captive or exclusive agent is that the agent and their customer only have a single provider to bargain with for pricing and services.


An exclusive agent provides a price quote for the coverage requested and that's the end of negotiating for the best deal. The agent cannot obtain a better rate without reducing coverages. These agents are stuck with their exclusive provider's current published rates. The price quoted is the price charged....take it or leave it. Later if and when an insured has a claim, the insurance provider often responds by raising premiums or, worst case, cancels insurance. The former customer must now scramble to not only find new insurance, but they also have to find a different agency to buy it from. Anytime a consumer wants to shop around for the best deal (best coverage at the lowest cost), they have to call several different agencies themselves.


Independent agencies are completely different. These agencies have arrangements with multiple insurance providers. For example we have access to insurance providers such as Travelers, Nationwide, Safeco, Progressive, Grange, Donegal and State Auto just to name a few. The insurance products they sell are equal in quality to those sold by the exclusive agencies. The major difference is that an independent agency always compares rates from several different insurance providers to ensure their customers pay the least amount for the coverage they need. If you have a claim and the insurance provider raises your premiums or cancels your insurance, the agent will immediately shop around and obtain replacement insurance from a different providers at the best rates available.


A good independent agency will also always shop for the best coverage at the lowest costs for their customers on an annual basis...another customer advantage.


We hope this helps explain why we joined to form our independent insurance agency, and we hope you will give us the opportunity to provide a quote for your insurance needs. We promise to only work work in the best interests of you and your family.


Sincerely yours,


Vicki and Jason


Please give us a call or drop by our offices anytime and we will do our very best to assure you have the most appropriate insurance coverage for you and your family's needs at the best possible price.


Tolbert Tower Insurance





Posted 11:53 AM

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