This is one of the biggest questions experienced captive agents ask. The answer depends heavily on your contract, but there are several common paths.
Here are the primary options captive agents should evaluate before making a move:
1. Join an Independent Agency or Aggregator (Lowest Risk)
Many former captive agents choose to affiliate with an established independent agency or network.
Typical benefits include:
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Access to multiple carriers
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Agency management system
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Comparative rating
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Training and mentoring
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Carrier appointments
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E&O guidance
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Lower startup costs than going completely solo
This is often the fastest path to becoming independent.
2. Start an Independent Agency From Scratch
This offers the most control but also requires the most preparation.
Agents will need to secure:
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Business entity (LLC, corporation, etc.)
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E&O insurance
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Agency management system
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Comparative rating software
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Carrier appointments (or an aggregator relationship)
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Website, marketing, and licensing compliance
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Banking, accounting, and operational processes
3. Purchase an Existing Book of Business
Buying an established book can provide immediate renewal income and existing client relationships.
Before purchasing, evaluate:
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Retention rates
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Carrier mix
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Profitability
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Loss ratios
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Age of the book
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Commission structure
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Transferability of business
Often available through Networks or Cluster Groups.
4. Purchase an Existing Agency
Instead of building from zero, some agents acquire an agency that already has:
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Carrier contracts
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Staff
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Systems
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Existing revenue
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Established processes
This generally requires more capital but can accelerate growth.
5. Join an Existing Independent Agency as a Producer
Some agents prefer to learn the independent market before becoming owners.
This approach allows them to:
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Gain experience with multiple carriers
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Understand commercial markets
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Learn agency operations
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Build confidence before launching their own agency
Questions Every Captive Agent Should Ask Before Leaving
Do I own my book?
This is often the most important question.
Understand:
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Who owns the expirations?
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Can you retain clients?
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Can you sell your book?
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What restrictions apply after leaving?
Can I contact my former clients?
Review any:
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Non-solicitation provisions
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Confidentiality clauses
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Customer ownership language
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Marketing restrictions
An attorney familiar with insurance agency agreements can help interpret these provisions.
What does my contract require?
Understand:
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Notice requirements
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Exit procedures
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Deferred compensation provisions
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Commission treatment
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Return of company property
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Branding obligations
What income do I need during the transition?
Many independent agencies take several months to build sufficient recurring revenue.
Plan for:
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Personal living expenses
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Business startup costs
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Cash flow
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Marketing budget
Which carriers will I have access to?
Independent agencies often work with multiple personal and commercial carriers.
Evaluate:
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Product mix
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Geographic availability
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Appetite
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Commission schedules
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Technology integration
What technology will I need?
Examples include:
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Agency management system
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Comparative rating platform
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CRM
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Document management
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E-signature
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VoIP phone system
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Website
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Email platform
What support is available?
Ask whether you’ll receive:
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Carrier onboarding
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Marketing assistance
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Sales coaching
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Operations support
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Commercial training
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Accounting guidance
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Claims assistance
Financial Questions
Evaluate:
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Startup costs
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Monthly technology expenses
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E&O premiums
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Marketing budget
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Office needs (if any)
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Licensing fees
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Working capital
Personal Questions
Ask yourself:
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Can I market myself?
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Am I comfortable making business decisions?
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Am I prepared for a transition period?
Red Flags to Watch For
Before joining any independent agency, cluster, or aggregator, ask:
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Do I own my book of business?
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How long is the agreement?
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Are there punitive fees or penalties?
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Can I operate under my own agency name?
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Are there production quotas?
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How are commissions calculated and paid?
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What happens if I leave?
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Is there a non-compete or non-solicitation agreement?
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What support is included?
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Which carriers are available today—not just “coming soon”?
Advice for Former State Farm or Farmers Agents
Many captive agents already have strong sales, service, and relationship skills. The biggest adjustment is learning to navigate multiple carriers and compare coverage options instead of representing a single company.
The best transitions are usually those where the agent has:
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Reviewed their contract with qualified legal counsel.
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Built a realistic financial plan for the transition.
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Selected an independent model that fits their goals.
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Focused on long-term ownership rather than short-term income.
These steps can help reduce surprises and position the agency for long term growth.
Be sure to request our downloadable checklist for prospective agents: 10 Questions Every Captive Agent Should Ask Before Going Independent. Request your free copy today!
