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Independent insurance agencies are offices that sell a service to the general public. A client searching for car insurance walks into an agency off the street and wants to purchase a policy. An agency sales rep will take down their information and price them a policy with several different insurance carriers. They facilitate the application process, advise the client on coverage questions, and help the client with the claims process should they be involved in an accident. Sometimes they handle customer service and policy endorsements for their customers, while other times the carrier handles that directly. They do not get to keep the policy premium that the insured pays, but rather are paid a commission by insurance companies for policies they sell (normally around-% of the premium). Some agencies charge an additional "broker's fee" for their services.
These companies are the ones that provide the insurance coverage. They are responsible for coming up with the insurance programs that they sell. They file the rates with the state department of insurance, collect premiums, pay claims, etc. If not represented by a MGA, they also handle everything that a MGA does as well. Insurance carriers can either sell their products through direct agents (salaried sales representatives that work directly for the carrier), through independent agencies, through captive agencies, or through a combination of the three.
