An insurance agent is a professional who represents one or more insurance companies and sells their policies for a fee. They can work full time in an agency or as independent contractors. Agents act as a conduit to provide information to insurance buyers, who then have the option of choosing between the policies and contracts available from the insurer. Agents are licensed in the state in which they operate and must comply with all applicable statutes and regulations.
Agents can be either captive or independent. Captive agents represent a single insurance provider, while independent agents can work with different companies in a similar way to insurance brokers. Captive agents typically receive between 3% and 10% of each year's premium, also known as renewals or final commissions. When working with customers, agents start by asking for details about their home or other property that needs to be insured.
They then provide quotes from the companies they represent and persuade customers to sign the new insurance contract. If a customer needs to change information because they moved or renovated their home, the agent will guide them through the changes and make recommendations for new coverages. Insurance agents are often referred to as “captive agents” because they represent an insurance company. They typically sell on behalf of a small number of companies (if not just one), which means they have in-depth knowledge of the products they sell.
Many agents are now fortunate enough to receive compensation for a month or two of training before being placed on commission alone.