What is an Independent Insurance Agent and What Difference Does it Make?

I'd never thought about channels outside of my cable provider (as in "109 channels and nothing on worth watching"). Insurance is sold through three different channels. My buddy Greta is an "Independent." If she's joined at the hip with anybody, it's me.

You just got a notice in the mail that your insurance rates are increasing. You haven't made a claim. Your car has not been "jacked" nor your home obliterated by an act of God. The rates are simply going up. What can you do?

If you bought your policy from a "direct" writer--one that sells a single company's products over the phone--you call. You probably get to listen to some light classical or light jazz while you're on hold. Then you get a song and dance about rising costs and increased claims in hurricane alley or earthquake junction. In the end, you might even feel charitable about "sharing the pain." But you're still likely going to pay more to maintain the same coverage.

If you bought your policy from what's known as a "captive agent,"--one that sells exclusively, by contract, one of the giant mega insurer's products, you can probably have a face-to-face sit-down. You likely have a relationship with this person. He will be sympathetic, but his hands are tied. She can help you juggle coverages and increase deductibles to lower your rates, but suddenly you've got less protection.

Then there's the "independent agent"--who represents a variety of companies and products. You simply check in with this person you know and trust, who regularly reviews your policies and looks for the best value. She's probably already aware of your plight and can either lobby on your behalf or help you find a new provider or policy. He is neither tied to nor beholden to a particular insurer.

Greta Stogner is an independent by choice. She can access hundreds of policies from a number of companies, but she represents you. Think of her as one of your financial consultants. She'll learn your needs, your circumstances, your tolerance for risk and help you choose wisely as well as thriftily.

She's there when you need to make a claim, too. Just try finding one of those direct sellers when you feel the need to choke someone over a rude impersonal letter or unfavorable settlement offer. Greta is your advocate with the company. If you have a problem, it's her problem, too.