It was happy hour. I was chatting with a friend and gulping a dark Modelo. He was complaining about his Homeowner’s premium. I explained that rates have dropped and now is “…the best time to shop.”
His response was: “Shop!? I’m not retired like you. I don’t have time to shop. I work 24/7, blah, blah, blah!” Then… “Do you want another beer or not?”
I guzzled the last of my Modelo (see Note #1 below) and suggested he could save time and find a lower rate by calling an independent agent. To which he responded… “What’s an independent agent?”
I knew he was with State Farm, so I said: “it’s the opposite of a captive agent!” Then, he said: “What’s a captive agent?”
“Google it!” I impatiently shot back simultaneously signaling for another round.
Anyway… now, here, word-for-word, with no edits whatsoever, is the question we both “Googled” and the AI response we both received. All just FYI and all just for the purpose of finding out if you agree. I close below with a question for independent agents. Please sign in to leave your thoughts.
The Question I Googled: When shopping for home insurance, is it better to use an independent agent or a captive agent that represents only one company?
Chat GPT’s Answer: Choosing between an independent or captive agent depends on whether you prioritize price and variety or brand-specific expertise.
Independent Agents
Independent agents partner with multiple insurance carriers, acting as “personal shoppers” to find the best fit across different companies.
-
- Pros:
- More Choices: They can shop your policy across dozens of carriers to find the best rate.
- Savings: Consumers using independent agents to compare quotes have saved an average of 23% compared to single-carrier purchases.
- Unbiased Advocacy: Since they aren’t tied to one brand, they can offer objective advice and pivot you to a new carrier if your current one raises rates.
- One-Stop Shop: They can bundle different needs (home, auto, umbrella) from different providers under one point of contact.
- Cons:
- Pros:
Knowledge Depth: Because they manage many brands, they may not know the minute details of every single policy as deeply as a captive agent.
Captive Agents
Captive agents (like those from State Farm, Allstate, or Farmers) represent only one company.
-
- Pros:
- Deep Expertise: They are specialists in their specific company’s products and can explain complex riders or exclusions in extreme detail.
- Internal Resources: They often have direct lines to their company’s claims and underwriting departments, which can sometimes lead to faster internal resolution.
- Exclusive Benefits: Some companies offer exclusive loyalty discounts or specialized “gold-tier” programs only available through their direct agents.
- Cons:
- Limited Options: If their company’s rate is high or they don’t cover your specific risk (like a high-risk flood zone), they cannot offer an alternative.
- Company Interest: They ultimately represent the insurer’s interests, not just yours.
- Pros:
If you’d like, I can help you find highly rated independent agents in your area or provide a checklist of questions to ask an agent before you sign.
Note: AI responses may include mistakes. For financial advice, consult a professional.
My question for my independent agent subscribers is: “Do you agree with the AI response above? And, if not, why not?”
If “yes” then… shouldn’t everyone who values a lower homeowners price which, according to Chat GPT averages 23% lower, be using an independent agent?
And finally, if you’re an independent agent, shouldn’t you be telling everyone to just… Google it!?
##end##
NOTE #1: According to AI “Modelo” typically refers to the iconic Mexican beer brand owned by Anheuser-Busch InBev. Founded in 1925 in Mexico City, it has grown to become one of the top-selling beer brands in the world. I believe it to be very popular with independent agents.
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