08/26/2026
Cut Out the Middleman? Let’s Talk Insurance.
I’ve seen the “cut out the middleman” argument come up when people talk about insurance, so let’s clear something up.
If you work with an independent insurance agent or broker, you generally do not pay an additional fee simply because you have an agent. Independent agents are compensated by the insurance carriers they represent, typically through commissions based on the policies they write. That compensation comes from the carrier—not as an extra charge added to your premium by the agent.
And here’s something many people don’t realize: captive insurance agents are also compensated by the insurance company they represent. The primary difference is that a captive agent generally represents one insurance company, while an independent agent can represent multiple carriers and compare options on your behalf.
So when you’re shopping for insurance, the question isn’t necessarily “How do I cut out the middleman?”
A better question may be: “Who can shop the market for me and help me compare my options?”
When you purchase directly from a carrier without an agent, you’re still paying for the insurance company’s operations, employees, customer service, claims departments, technology, advertising, and everything else required to service that policy. The cost doesn’t simply disappear because you chose to buy directly.
An independent agent can provide another layer of service by helping you compare available carriers, coverage options, pricing, and policy details—all without charging you an additional amount simply for the fact that you have an agent.
The bottom line: Don’t assume that eliminating the agent automatically means eliminating a cost. Insurance pricing is much more complicated than that.
And please—before deciding that an independent agent is an unnecessary “middleman,” ask what they actually do for you. You might be surprised. 😉
Coverage, availability, premiums, and compensation arrangements vary by carrier, policy, state, and agency. This post is intended for general informational purposes and is not a guarantee of pricing, coverage, or savings.
