What are two kinds of insurance agents and what is the difference?

Asked by: Mr. Cloyd Moen PhD  |  Last update: February 11, 2022
Score: 5/5 (42 votes)

There are two main differences between insurance agents and brokers: Agents represent insurers, while brokers represent consumers. Agents can complete insurance sales (bind coverage), while brokers cannot.

Are there different types of insurance agents?

There are two types of insurance agents:
  • Captive Agents. Captive agents work for one insurance company either full-time or as independent contractors. ...
  • Independent Agents. ...
  • Retail Brokers. ...
  • Wholesale Brokers. ...
  • Surplus Lines Brokers.

What is the difference between an independent agent and a broker?

A broker represents the insurance buyer. Agents serve as representatives of insurance companies and may be captive or independent. ... An independent agent represents multiple insurers. An insurance agency sells policies on behalf of insurers that have granted it an appointment.

What is the difference between captive and non captive?

A captive agent is an insurance agent that works for only one insurance company. ... The opposite of a captive agent is an independent agent that works for many insurance companies. Captive agents are usually paid a salary and commission and are provided with benefits.

What is the difference between a captive agent and an independent agent?

In short, captive insurance agents are contracted to work for one insurance company and can only sell that company's policies. On the other hand, independent agents are contracted to work with a variety of insurance companies and can sell policies from multiple providers.

Two Kinds of Insurance Agents

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What do independent insurance agents do?

What is an independent insurance agent? An independent agent works with multiple insurance companies to offer an entire suite of insurance products to meet consumer needs. Captive agents work with just one insurance company, offering only the products offered by that specific company.

Who are captive insurance agents?

Captive (sometimes referred to as “dedicated”) agents are insurance producers who work for one company and sell one company's products. Conversely, independent agents work for multiple companies and can sell multiple different types of products to their customers.

What is a non captive insurance agent?

Non-captive agencies don't work for one insurance company, so they're allowed to purchase insurance that come from different businesses. This independence is very useful—especially when not all companies provide the same amount or type of coverage. They also aren't tied to the strict regulations of the industry.

Are captive insurance Agents employees?

A licensed insurance agent who works for one single insurance company exclusively, is known as a captive agent. A captive agent represents one single insurance company and sells only the products offered by that company. A captive agent may be a full-time employee of the company or an independent contractor.

What does captive mean in insurance terms?

Issue: In its simplest form, a captive is a wholly owned subsidiary created to provide insurance to its non-insurance parent company (or companies). Captives are essentially a form of self-insurance whereby the insurer is owned wholly by the insured.

What are insurance agents and brokers?

Insurance agents, often referred to as “captive” agents, typically represent one insurance company. Insurance brokers, on the other hand, represent multiple insurance companies to ensure that you are connected with the right insurance for you. An agent acts as a conduit to provide information to insurance buyers.

What is difference between agent and broker in insurance?

In health insurance, an agent represents the interests of a health insurer, and the agent can’t interact with the policy buyers. A broker gives a comparison of different policies to the customer. The broker and customer have a legal relation.

Who are agents and brokers?

Manufacturers may use brokers and agents, who do not take title possession of the goods, in marketing their products. Brokers and agents typically perform only a few of the marketing flows, and their main function is to ease buying and selling—that is, to bring buyers and sellers together and negotiate between them.

What is the purpose of an insurance agent?

Insurance agents sell and negotiate life, health, property, or other types of insurance to match the needs of their clients. As an insurance agent, you may work for an insurance company, refer clients to independent brokers, or work as an independent broker.

Who makes more money insurance agent or broker?

Typically earn more commission from insurance companies than captive agents who enjoy more stability. Pay their own overhead costs for running an independent business.

Can an insurance agent have another job?

All levels of insurance agents/adjusters may sell insurance full or part-time provided there is no conflict of interest. ...

Why do insurance agents quit?

Most agents quit because they can't get enough sales to support themselves and their families. The only way to change that is to learn how to get more leads, better leads, and follow up on them. People go on fact-finding missions online. They don't care who answers their question, as long as they get answers.

Can you sell insurance for two companies?

Unlike captive insurance agents, independent insurance agents are not contracted to work with one single company, and they can sell policies from multiple insurance companies.

Is Aflac sales commission only?

Job is commission based only. If you don't sign accounts, you don't get paid. You have to use your own vehicle, gas, and time to prospect.

Are Allstate agents captive?

State Farm, Allstate, and Geico are all insurance companies that will only sell their products through their agents. They don't permit their agents to sell any products from any other insurance companies. Hence the word captive. These agents are captive to a single insurance company.

What is twisting in the insurance industry?

Twisting — the act of inducing or attempting to induce a policy owner to drop an existing life insurance policy and to take another policy that is substantially the same kind by using misrepresentations or incomplete comparisons of the advantages and disadvantages of the two policies.

What are exclusive agents?

Exclusive Agent means an agent authorised to the exclusion of all other persons including the copyright owner and, if any, its exclusive licensee to exercise a right which would otherwise be exercisable exclusively by the copyright owner and/or its exclusive licensee.

Is Progressive a captive agent?

Examples of captive insurance agents are those who sell for State Farm, Farmers, and Allstate. ... Examples of the types of insurance companies that distribute products through independent insurance agents are, Travelers Insurance, The Hartford, Mercury Insurance and Progressive.

Are independent insurance agents good?

An independent agent can do important things for you: Agents have at their disposal the ability to quickly check prices and coverages with dozens - if not hundreds - of different insurance companies. Since rates vary widely an independent agent can very likely get you a better deal than you can get for yourself.