The term insurance “agent” gets used all the time, by both true agents and what are actually brokers. It’s important to know the difference between the two because one is working for you, and the other is working for an insurance company.
An insurance agent, specifically whats called a “captive” agent, is someone who works for a specific insurance company and only that company. For example, a State Farm agent only works for State Farm and cannot quote or bind policies for any other insurance. Captive agents work for the insurance company they represent. When they talk to a client, they do not necessarily have your interests in mind, as they are getting paid directly by the specific company they work for and only that company.
An insurance broker is someone who represents multiple insurance companies. Brokers are in a unique position to write business for a client, as they can quote many different insurance companies on your behalf. A broker is kind of a middle man who facilitates the best fit for the insurance company and the best situation for the client. When push comes to shove however, the broker ultimately represents the client. If a company does not fit a clients needs, a broker can simply put the client with a different company who does. Captive agents only have one option, so if something goes wrong and the premium goes up, the only solution for a captive agent is to apologize.
I’m sure you’re probably thinking, why would anyone go to a captive agent over a broker? Close your eyes and think of some insurance companies. What did you think of? State Farm? Geico? Nationwide? Allstate? All of these companies employ captive agents. Now try and think of a brokerage you know. The fact is most captive agencies advertise constantly, so that when you do need insurance, you’re most likely to pick up the phone and call one of them first. Maybe even 4 or 5 of them before you give up and just pick an option. In some cases brokers can be appointed with dozens of companies who’d be happy to insure you for less, because they don’t have an astronomical marketing budget. If you couldn’t think of a broker earlier, you know one now in Red Beard Insurance Group. The Beard’s got you covered!