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More than Insurance Comprehensive Risk Management

What's the Best?

The other day, I had a funny conversation with my oldest son. He and his wife recently moved, and they are in the process of purchasing a house. He was referred to an insurance agent who goes to his church, and he and his wife had met with him to get a quote. This agent happened to be a direct writer, and when my son called to tell me about it, he said, “The guy seemed to know what he was talking about, but the whole time I felt like I was doing something wrong.” I asked why, and he said it was because his whole life I had lead him to believe those agents (direct writers) were bad. This same son, when he was five or six, told a few people that his mom made insurance commercials (I had moved from personal lines to commercial lines), so this wasn’t the first time I had accidentally mislead him. I assured him that direct writers aren’t bad, and then I asked him to send me a copy of the quote so I could check it out for him (I would have done that no matter who had given him the quote).

I don’t think direct writers are bad. Most of the agents who work for direct writers seem to know their available products very well. I am friends with several of these agents, and I respect them very much individually as well as professionally. Having said that, I have worked in the independent agency system for 29 years, and I definitely believe strongly in it.

The difference between a direct writer and an independent agent is pretty basic. A direct writer is either employed by or represents one insurance company. An independent agent has contracts with multiple insurance companies and therefore has the ability to get quotes from more than one insurance company for the same client. Along with the ability to comparison shop, independent agents have access to markets for some more unusual risks. Most of the time, an independent agent doesn’t have to say, “I’m sorry, we can’t write that”.

Some may think the direct writers are much larger than the independent insurance agents. Based on television advertisements alone, many direct writers obviously have huge marketing budgets. While we aren’t represented by any cute reptiles or other mascots, independent agents make up a huge part of the insurance industry. According to IIAT (Independent Insurance Agents of Texas), independent agents have access to more than half of the top insurance companies in Texas. Independent insurance agents manage insurance policies for approximately 1 million Texas homeowners and write approximately 2.8 million auto insurance policies each year. Independent agents write 80% of the $12 billion in commercial insurance purchases in Texas each year. IIAT is the nation’s largest state association of independent insurance agencies representing 15,000 agents, brokers and insurance professionals. Our membership in IIAT gives us access to the leading source for education and technical insurance coverage information available in Texas.

IIAT is made up of independent agents who are self-employed, paid on commission, and are local business owners, not managers of the local office of a large insurance company. I have heard the misconception that direct writers have lower premiums because they don’t have to pay commission to agents. All insurance companies have to pay commission to agents or payroll to employees to handle insurance transactions. The truth is the only way to know for sure what company has the lowest premium is to get price quotes from them. When doing so, you also need to make sure you are getting the best coverage available for the best premium, or you at least need to make sure you have an option to purchase or decline coverages based upon your specific needs. Your insurance agent is the best person to assist you in the sometimes complicated matter of selecting insurance coverages.

The motto of the Independent Insurance Agencies of America is “Your Independent Insurance Agent Serves You First”. This is the core behind why I believe in the independent agency system. Our clients are the “you” who we serve first. We have strong partnerships with our many insurance companies, and this allows us to do the best job for our clients.

Please visit, or call our office at 940-549-2525 if we can be of assistance. For more information on independent insurance agents, visit

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