Understanding The Difference Between An Insurance Agent, Broker, And Agency

When it comes to insurance, it can be difficult to understand the differences between an insurance broker, agent, and agency. Knowing the distinctions between these three professionals can help you make an informed decision when selecting the best option for your insurance needs.

Insurance Brokers

An insurance broker is an independent contractor who acts as an intermediary between clients and insurers. They work with multiple insurance carriers and help you find the right coverage for your individual needs. Brokers offer impartial advice to help clients find the best coverage while negotiating on their behalf with insurance companies. They do not work exclusively for any one insurer and are not beholden to any one company. As such, they have access to a variety of policies and can provide recommendations to their clients based on their specific requirements. They can even show you quotes from many different insurance companies so you can see how they compare. 

Insurance Agents

An insurance agent, on the other hand, is a representative of a specific insurer. They are licensed to sell policies from their insurer and are often employed by the insurer. Agents are usually paid on a salary or on commission. They are responsible for recommending and selling policies to customers. They are typically knowledgeable about their insurer's products and can provide in-depth information about the coverage offered. However, they do not know the details of another company's products and cannot compare and contrast them.

Insurance Agencies

An insurance agency is a business that represents several insurers and is typically owned by an individual or group of individuals. Agencies are responsible for providing a range of services such as policy comparison, customer service, and claims handling. They employ both brokers and agents to help sell their products. These businesses can provide clients with access to multiple insurance products and may be able to negotiate better rates and coverage. However, some agencies specialize in a specific type of insurance. This is often a good option when you are looking for specialty insurance. Specialty insurance can cover things like antiques, guns, or a high-risk business like bungee jumping. 

To sum up, insurance brokers are independent contractors who act as intermediaries between insurers and clients, insurance agents are representatives of a specific insurer, and insurance agencies are businesses that represent multiple insurers. Understanding the differences between these three professionals can help you make the best choice for your insurance needs.

For more information about insurance, contact a local provider.