What is an Insurance Agent?

An insurance agent, also referred to as an insurance broker, is your local representative to any number of insurance companies.  An agent must be licensed by a state board before he or she can legally sell insurance policies.  There are two types of insurance agents; captive and independent. Captive insurance agents only represent one insurance carrier. Independent insurance agents, on the other hand, partner with a number of different insurance companies based on their areas of expertise and coverage.

Agents are considered the retail side of insurance and will solicit, sell or negotiate insurance policies on your behalf for compensation.   Perhaps the most important job of an insurance agent is to guide you, the prospective insured, with developing risk management strategies in line with your risk profile.  A good insurance agent will work closely with you to assess the kinds of risks you regularly encounter and educate you about the policies that are available to you for each type of risk.  With the help of your insurance agent, you may decide to buy a regular policy and then supplement it with endorsements or additional policies where needed.

Once you have decided upon and purchased a policy, you are required to make regular payments, called premiums to the insurance company.  That said, it is your agent’s job to ensure that you are making your payments in a timely manner, often sending out friendly reminders; they should also alert you to any rate or policy changes.

And last but not least, the most important part of an agent’s job happens when you make a claim. For example, following a natural disaster or a fire, you, the customer, are urged to contact your insurance agent as soon as possible to place your claim.  Once your claim is processed, your insurance agent will likely send out a specialist called a claims adjuster to assess the damage and calculate the value of your claim.  At this time, your insurance agent will often act as an informal arbitrator between you and the parent insurance company, giving you advice as to the best way to present your claim with the most favorable outcome.