Independent agent
An independent agent is a licensed insurance producer who represents several insurers instead of just one. The agent can compare and place coverage with the insurers the agency is appointed by, explain policy choices and service the policy. The agent usually represents those insurers, not you, and the insurer commonly pays the agent's commission.
Also called: independent agency, independent agent or producer, independent agency system
An independent agent can show you options from the insurers the agency represents, so one conversation can cover more than one company's quote. The label describes how the policy is sold, not what it covers: your limits, deductibles, exclusions, endorsements, insurer name, claim instructions and any disclosed fee are all in the policy and quote documents. Independent agents "may sell policies from many different companies," represent those insurers, and are paid commissions by them, according to the NAIC (opens in a new tab).
How an independent agent is paid
The insurer, not the policyholder, commonly pays the agent a percentage of the premium under the agency agreement. The 10% rate below is illustrative, not an average; actual commissions vary by policy and insurer.
Hover or tap a row to highlight it.
| Item | Amount |
|---|---|
| Annual premium paid by the policyholder | $1,200 |
| Insurer's commission to the agent (10%) | $120 |
| Left with the insurer before claims, expenses and taxes | $1,080 |
The independent-agent label does not add a separate charge to the policyholder, reduce the premium or guarantee a lower price. Some policies bought directly may cost less because no agent commission is paid, according to the NAIC's auto insurance shopping guide (opens in a new tab). A broker or producer fee may apply in some transactions and must be disclosed where the law requires it.
Coverage choices an agent will walk through, and what each changes
The agent presents each insurer's options; the independent label sets no amounts or prices of its own. The choices that move premium and payout are the same ones you would face anywhere:
- Auto liability limits. Connecticut's minimum is $25,000 per person and $50,000 per accident for bodily injury plus $25,000 for property damage, or a $50,000 single limit, along with at least $25,000/$50,000 of uninsured and underinsured motorist coverage, per the Connecticut Insurance Department (opens in a new tab). Higher limits add protection and may add premium.
- Collision and comprehensive. Connecticut law does not require them, though a lender or leasing company may. Dropping them can lower premium and leaves you paying for damage to your own car.
- Deductibles. A higher deductible generally lowers premium and raises what you pay after a covered loss. The Connecticut Insurance Department (opens in a new tab) gives $500 and $1,000 as common homeowners examples.
- Homeowners limits. Typical limits are 10% of dwelling coverage for other structures, 50% for personal property and 20% for loss of use, according to the NAIC home insurance guide (opens in a new tab), though a policy may use other percentages.
- Replacement cost or actual cash value. Replacement cost pays to rebuild or replace without deducting depreciation; actual cash value subtracts depreciation and generally pays less.
- Insurer availability. The number of insurers represented varies by agency, state, line of insurance, underwriting rules and appointments.
A captive agent, by contrast, represents one insurer or insurer group. A broker is generally understood to represent the buyer and may charge the buyer a fee, while agents commonly receive insurer-paid commissions, per NAIC's regulator introduction (opens in a new tab). Our guide to independent vs captive insurance agents compares the two in more depth.
Where you see the term
"Independent agent" shows up on agency websites, ads, quote forms, applications, binders, renewal notices, agency letters, producer information, state license and appointment records, and commercial insurance proposals. It can apply to auto, home, condo, renters, life, health, pet, flood and business insurance sold through an independent agency.
It does not appear in the insuring agreement, exclusions, conditions or endorsements as a term that changes coverage. The declarations page names the insurer, named insured, policy period, limits, deductibles and premium, and the agent may be listed elsewhere on the paperwork. After a loss, the agent can help you report it, but the insurer decides coverage and pays covered claims. An "independent adjuster" is a different role: a claims professional who works for insurers.
How Connecticut and New York define the relationship
Neither state licenses "independent agent" as its own category. Connecticut defines an agent as "an insurance producer appointed by an insurer to act on the insurer's behalf" and bars a producer from acting as an insurer's agent until appointed, with the insurer filing notice within 15 days, under Conn. Gen. Stat. §§ 38a-702a and 38a-702m (opens in a new tab). Those rules require licensing and appointment; they do not require an independent agent to represent every insurer or to represent you.
New York defines an insurance agent as an authorized agent of an insurer who sells insurance other than as a licensed broker, under N.Y. Insurance Law § 2101 (opens in a new tab), and requires insurers to file an appointment notice within 15 days under N.Y. Insurance Law § 2112 (opens in a new tab). Producers must make compensation disclosures in covered transactions under Regulation 194, 11 NYCRR Part 30, according to the New York DFS (opens in a new tab).
Questions to ask an independent agent
- Which insurers are you appointed to represent for this type of policy? This shows the real market available through the agency.
- Are you acting as an agent for an insurer or as a broker for me in this transaction? The answer affects whom the professional represents and whether a broker fee may apply.
- What commission, service fee, broker fee or other compensation will be paid, and by whom? New York requires producer compensation disclosures in covered transactions.
- Are the quoted limits, deductibles, exclusions, endorsements and valuation method identical to my current policy? A lower premium can reflect less coverage or a higher deductible.
- After a claim, should I notify you, the insurer or both, and what deadline applies? The policy's notice and cooperation conditions control.
Frequently asked questions
These come up most when someone is comparing an agency with another option.
Does an independent agent represent me?
Usually not. An independent agent generally represents the insurers it works with. A broker is the professional generally described as representing the buyer, and some licensees act as either depending on the transaction.
Can an independent agent quote every insurance company?
No. The agent can quote only the insurers the agency represents and is appointed by, so ask which insurers were approached for your policy.
Is insurance cheaper through an independent agent?
Not automatically. Price depends on the insurer, coverage, limits, deductibles, underwriting and rating factors, as our guide on whether it is cheaper to buy through an agent covers.
Does an independent agent decide my claim?
No. The insurer applies the policy and decides coverage. The agent may help pass along information or explain the process. For what to weigh when picking one, see how to choose an insurance agent.