Skip to main content

Captive vs. Independent Insurance Agencies – What’s the Difference?

By June 18, 2021

If you drive down the Main Street of any small town, you’ll see signs for insurance agencies. Some carry the name of the brand they sell – likely a large company you’ve heard of – and some are local businesses, like Block Insurance

What’s the difference between these two types of agencies? In this article, we’ll explain the difference between independent and captive insurance agencies, and show how an independent agency can often provide superior service and a better price.

Independent vs. Captive Insurance Agencies

There are two main types of insurance agencies: captive and independent. 

Captive agencies can sell multiple types of policies, such as auto, home and life. But they only have one plan for each type since they sell products from only one company. Independent insurance agencies can sell insurance policies from multiple companies because they are not tied to any particular one. 

It all depends on the way a company is set up. Well-known brands (like State Farm, for example) are often captive – State Farm agents only sell that type of insurance. 

At Block Insurance, an independent agency, we can sell policies from companies like Grange Insurance, Hastings Mutual and Auto-Owners Insurance.

Included in the captive segment are companies that don’t have agents to represent them in the community. Instead, you can simply call a number and speak directly to someone at the company. This would include brands like GEICO or Progressive.

Another name for the State Farm type of example is “exclusive,” while another name for the Geico example is “direct”. There is a difference. Exclusive insurance companies have agents, but the agents only write policies for their company. Direct companies do not use agents, but rather use their own employees.

Don Ritchey, president of Block Insurance, cautioned people against relying on TV-commercial promises to choose their insurance company.

“[When you call a direct insurance company], you just call an 800 number. You talk to someone you don’t even know. You don’t know how much experience they have, and they only have one plan to offer you,” he said.

Request a free insurance quote today >>

How an Independent Agency Works

Independent agencies like Block Insurance can offer customers more choice and a more personalized experience. That’s because, as mentioned above, we can look at policies from a variety of companies and choose one that meets your specific needs the best.

You probably won’t see an independent agency advertising on TV or sponsoring national sporting events because they’re just like any other small business – focused on serving the local communities and giving back there.

Another difference between independent and captive companies is the speed at which they can provide quotes. A captive insurance agency can often provide a quote in a matter of minutes – that’s because they only have one set of products to look at.

And when insurance commercials on TV promise to save you a certain percentage versus other agencies, Ritchey says to look closer – often, that’s because they’re simply cutting out an agent who will provide you with superior service and options. 

Here’s what you need to know about insurance liability limits >>

Thinking About Switching Your Insurance Agency?

If you’re considering trying a new insurance agency, consider an independent one like Block Insurance. You’ll work with people who live and give back to your local community, not a big company where you don’t know anyone. 

You’ll also work with someone who can look out for your best interests and sell you a product that truly fits your needs because we’re not limited to just one insurance company. 

At Block Insurance, with locations in Waynesfield and Wapakoneta, Ohio, we offer the following types of policies:

  • Auto
  • Home and renter’s
  • Life 
  • Commercial 
  • Umbrella

Every time you request a quote, we’ll shop around to find coverage options that fit your needs and your budget. We’ll never sell you something you don’t need. 

You can count on us anytime you have a question or need to report a claim – we’ll be here for you.

Request your free, no-obligation quote today (and by the way, we don’t sell your information to other insurance companies like many online quote request forms do).