OCEAN CITY — Since Tom Heist IV joined the insurance agency in 1989 that his father founded here in 1965, he has watched the number of independent agents decline steadily.

He realized the Thomas H. Heist Insurance Agency he now runs would need to get bigger to successfully compete, by offering strong specialty products and perks such as free COBRA services for group health customers.

“I made the decision to grow in other communities to have the scale necessary to make us better than the rest,” he said. From the 12 employees when he started, the Heist Agency today has 65 in five offices across southern New Jersey.

The latest is in Vineland, where in October the agency acquired the Heritage Insurance Agency, its owners and staff bringing experience in that market that goes back 35 years.

The acquisition also gives the Heist Insurance Agency another strong specialty: Insuring bed and breakfast businesses, about 400 of them from Cape May to Long Beach Island and over to New Hope, Pa., he said.

That joins another even more robust specialty for the firm: insuring condominium associations large and small.

“We have more than 1,600 condo associations as customers,” Heist said.

The Heist Agency’s business and its 17,000 total customers are spread among three major areas.

Personal lines of insurance — which account for about 45 percent of the agency’s business — include home, auto, watercraft, personal property and umbrella policies.

As an independent agency, Heist said, his staff can shop around to fill a customer’s insurance needs with many insurance companies — and switch them as more cost-effective options are available in the industry.

“We are continually moving customers from carrier to carrier, depending on who’s offering our customers the best deal for their situation,” he said.

That’s especially important with rates rising as insurers account for their increased liabilities due to major storms such as Hurricane Sandy and the summer’s devastating derecho.

The personal lines at the agency are split between coastal and noncoastal customers, each served by different insurers and with more extensive criteria applied to those near the water, he said. Besides the headquarters in Ocean City, the agency has an island office in Margate, with the other three on the mainland in Egg Harbor Township, Upper Township and now Vineland.

The second major area — commercial insurance — provides businesses with liability, vehicle, workers’ compensation and umbrella coverage. That accounts for another 40 percent of agency business, Heist said.

The firm’s third major segment, producing 15 percent of revenue, is financial services, such as group health and group disability for businesses, long-term-care and life insurance, “lots of financial protection of assets,” he said.

One challenge with growth is maintaining the personal service and accountability that national and online companies can’t match but many customers prefer.

“It’s important to be there when the customers need you,” Heist said. “In a small community, if you don’t do a good job, people are going to know about it pretty quickly.”

For the Heist Agency, the answer has been empowering the directors of its various divisions and collaborating extensively on the firm’s actions and direction, he said.

“Everything we do is discussed and decided at the round table,” Heist said, referring to the section of his Ocean City office where the firm’s officers meet. “I don’t make any decisions by myself.”

A profile of the Thomas H. Heist Insurance Agency last year in the industry magazine Independent Agent showed its gross revenues increasing from $4.6 million in 2008 to $4.8 million in 2010.

The magazine said its clients then — before the recent addition of the Heritage Agency in Vineland — included 8,850 in personal lines and 3,100 commercial customers.

A future challenge the agency is watching closely, Heist said, is health care reform, which is worrying some customers and remains unclear in its impact.

“We will test it out personally before we advise our customers on what to do,” he said. “We’re not going to put out customers at risk to make decisions we haven’t tried ourselves.”

Such care has resulted in the agency receiving a Best Practices Award for six straight years from the Independent Insurance Agents & Brokers of America, he said, given to fewer than 1 percent of the nation’s independent agencies.

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