What is the purpose of an insurance agency?

An insurance agency, sometimes called an insurance agent, is a person or company authorized by an insurance company to sell the insurer's products in exchange for compensation. Agents are regulated by the laws of the state in which they work. An independent insurance agency represents you (the client) in the process of finding the best coverage at the most competitive rates. This may include coverage for your car, home, apartment, condominium, or business.

Even so, it can be useful to think of an agency as an assistant to the buyer. Your job is to represent the insurance company in the transaction while helping customers find the right coverage. The agent has an agency agreement, or contract, with the insurer that sets out the different types of insurance the agent 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 link a policy or provide temporary coverage before a policy is finalized and issued. An insurance broker will generally 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 whether they sell you a policy or not.

While some agencies specialize in a specific area of insurance, many promote themselves as “full-service partners.” insurance agencies offer an especially high value for customers looking for various types of insurance, for example, home and car. Mary loves to explain insurance in terms that her 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 insurance. An insurance broker could better serve a company that faces unique risks and challenges in finding coverage.

insurance agents are 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. Because brokers don't represent insurance companies, 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.

Nor can you 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. Keep in mind that if you're buying permanent life insurance, it's best to consult a paying financial advisor (more on that later). That means that if you're buying insurance for yourself, online (which you shouldn't do, by the way), you'll miss out on some of today's best options.

Property, accident, life and health insurance services offered through NerdWallet Insurance Services, Inc.

Angelia Brazille
Angelia Brazille

Unapologetic tv guru. Hardcore travel maven. Total travel fanatic. Typical twitter geek. Hardcore explorer.

Leave Reply

All fileds with * are required