Insurance brokers and insurance agents both sell insurance. They are the ones who help business owners obtain insurance coverage from the insurers at a reasonable price. Both insurance brokers and agents must have appropriate licenses to distribute the insurance they are selling. According to harbor compliance, license for an agency, brokerage, and other business are one of the categories in insurance license. But the terms insurance brokers and agents are not the same.
What is an insurance broker?
Insurance brokers are the mediators between the customers and insurance companies. They are experienced in different types of insurance and risk management. The goal of an insurance broker is to provide its clients with the best available policy.
An insurance broker with their knowledge and experience in the field of insurance assess the unique needs of the customers. They work to provide advice to the clients about the best insurance policy as per the requirements and add value to the clients. Further, they also assist their clients while making an insurance claim. That’s not it. Since insurance brokers work directly with the consumers, one can assure the availability of expert assistance to solve the insurance queries of the clients.
Elkaagency states that using an insurance broker can give you several benefits, including speed, less cost, the security of personal data, ease, and peace of mind.
What is an insurance agent?
Insurance agents, on the other hand, are professionals who sell the products of insurance companies for a commission. An insurance agent does help consumers select the right insurance policy. They represent the insurance company. There are two types of insurance agents. They are captive agents who represent only one insurance carrier and independent insurance agents who represent more than one insurance carrier.
Insurance agents provide necessary information to the clients about the available insurance companies. The insurance consumers then have to decide on the available policies offered by an available insurance carrier.
How insurance broker differ from insurance agents
An insurance broker does not work for the insurance company. They represent the clients. They work to provide advice to the clients about the best insurance policy as per the needs. Insurance agents are the ones who work for the insurance company. They are the ones who sell a particular policy on behalf of the insurance carrier.
Insurance agents only need to know about the products offered by one company or some number of companies it is associated with. It will make it easier for them to help policyholders keep up with the policy changes. It also further means better services to the clients. The same could not be expected from brokers because they must know about the products offered by numerous companies, which can prove to be a challenging task.
Both the insurance agents and brokers earn through the mode of commissions earned on sales. A captive insurance agent working for a single company can have stability in their revenue. On the other hand, a broker who works with a variety of insurance companies can have income variance depending on the insurance policy is sold. But the brokers have flexibility in choosing the insurance company. They can select the insurance company offering a high commission rate, given that the carrier can offer insurance policies to meet the needs of clients.