What is the Difference between Insurance Agent and Broker

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In the process of obtaining and maintaining an insurance policy for your house or personal belongings, you may have run into different individuals who carry out different aspects of obtaining an insurance policy. At times, you may have even run into an individual who identified themself as an insurance agent and other individuals who identified as insurance brokers. All of these names and different roles may have left you wondering: what is the difference between an insurance agent and an insurance broker?

In general terms, both an insurance agent and an insurance broker are licensed professionals who sell insurance company products to consumers generally in exchange for a commission. Typically, an insurance agent helps customers select the right insurance to buy. Insurance agents generally represent the insurance company in the transaction.

There are generally two types of insurance agents. One type of insurance agent is a captive insurance agent. A captive insurance agent typically represents only one insurance company. An independent insurance agent, on the other hand, is an insurance agent who represents more than one insurance company.

In most cases, regardless of whether the individual is a captive agent or an independent agent, the insurance agent works on commission basis and can execute certain insurance documents providing coverage to a consumer or homeowner.

An insurance broker, on the other hand, is generally a licensed professional who represents consumers in an attempt to obtain the best insurance coverage for that individual’s needs. Unlike the captive or independent insurance agents who represent one or more insurance companies, a broker’s primary obligation is to the customer or insured.

It should be noted that insurance brokers do not represent insurance companies. They cannot bind coverage on behalf of an insurance company and they must hand over the account to the insurance company or to an insurance agent to complete the transaction. An insurance agent is generally the party that can complete an insurance sale, which may have been started by an insurance broker, ultimately binding the coverage between the insurance company and customer/homeowner.

If you as a homeowner or business owner and are having difficulties with your insurance claim because of the conduct of either an insurance agent or an insurance broker failing to do what they should have done, please consult with an attorney who is familiar and experienced with homeowner insurance policies and claims to advise you on your legal rights and offer you alternatives to protect those rights.

DISCLAIMER: This and other segments posted on this website are offered for informational and discussion purposes only and is not offered as legal advice. This office only represents homeowners and property owners. We do not represent insurance companies. The information contained in this segment should not be considered to be legal advice.