An insurance agency, also known as an insurance agent, is a person or company authorized by an insurance company to sell their products in exchange for compensation. Agents are regulated by the laws of the state in which they work. An independent insurance agency acts as a representative for the client, helping them find the best coverage at the most competitive rates. This could include coverage for cars, homes, apartments, condominiums, or businesses.
It is helpful to think of an agency as an assistant to the buyer. The agent's job is to represent the insurance company while helping customers find the right coverage. The agent has a contract with the insurer that outlines the different types of insurance they can sell and the commission rates for each policy. Independent agents represent insurance companies, not the people who purchase the policies, while brokers represent the buyer. Agents can also provide temporary coverage before a policy is finalized and issued.
An insurance broker will usually work with an agent or insurer to link a policy. Before that happens, the price can still change. If your insurance agent receives compensation just for wages, you have no reason to worry because you will be paid the same amount regardless of whether they sell you a policy or not. Some agencies specialize in a specific area of insurance, while others promote themselves as “full-service partners”.
Insurance agenciesoffer great value for customers looking for various types of insurance, such as home and car.
Agents strive to explain insurance in terms that their customers can understand so that they can make informed decisions about their coverage. Agencies don't create or subscribe to policies, but rather work to connect people looking to buy insurance with companies that want to sell it. An insurance broker could be more beneficial for a company that faces unique risks and challenges in finding coverage.
Insurance agentsare valuable advisors throughout the year, not just when buying or renewing a policy. In addition to that, your agent can sell other financial products, such as annuities, and if they buy insurance from you, they will likely offer you those products as well.
Brokers don't represent insurance companies, so they can't link coverage on behalf of an insurer when buying insurance. Broker fees aren't usually refundable, so if you cancel your policy, you won't receive your money unless your insurance broker has been dishonest. You also can't guarantee that you will work with someone who is an expert in Massachusetts insurance. However, an unscrupulous agent can be as polite and professional as anyone else and can easily lead those who don't fully understand their own insurance needs to buy unnecessary or overpriced coverage. It's best to consult a paying financial advisor if you're buying permanent life insurance. That means that if you're buying insurance for yourself online (which you shouldn't do), you'll miss out on some of today's best options.
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