What is Direct Writer

A direct writer is an insurance agent or insurance company that only issues insurance policies from a single insurance company. A direct writer, also called a captive agent, represents a single company and does not shop around at several companies to find a client the best policy for the best price. Most of the insurance companies that are household names are direct writers.


Direct writers are employees of a single insurance company, whereas independent agents are self-employed and make money from the commissions they receive from various insurance companies when they sell insurance policies. Consumers do not pay independent agents a fee for the service they provide.

Direct Writers vs. Independent Agents

Direct writers were more common than independent agents until the 1990s, when the insurance business began to change. Insurance companies laid off thousands of their own agents, and independent agents, who are essentially freelancers, became more common. Independent agents are not employed by any insurance company; they have their own offices and pay their own business expenses. If there is a problem between a policyholder and an insurance company, an independent agent will work on behalf of the policyholder to resolve the issue. Independent agents can review your policies prior to renewal and shop your policies with other companies that may offer better pricing and coverage.

Direct writers sell all types of insurance policies, ranging from homeowners insurance to health insurance to personal liability umbrellas. However, consumers who choose to work with a direct agent will not necessarily get the best price on the best policy, but if they obtain all of their insurance policies from the same direct writer, they will usually receive a multi-line discount.

A direct writer can get a consumer the best policy at the best price within the options offered by that company, but cannot get the best option available from the entire market unless that option happens to be the direct writer’s. A direct writer’s loyalty is to the insurance company, while an independent agent’s loyalty lies with the client. During the claims process, a consumer can expect a direct writer to do what is best for the insurance company, whereas independent agents will act in the policyholder’s best interest. While there are many arguments in favor of a consumer choosing an independent agent over a direct writer when buying insurance, there are scrupulous and unscrupulous professionals among both direct writers and independent agents, so selecting one over the other when purchasing insurance is not automatically a good or bad choice.