Agent or broker? What’s the difference?

If you’re confused by the terms insurance agent and insurance broker, don’t worry— you’re not alone.

Insurance agents serve as representatives between you and an insurance company. In simplest terms, they explain basic policies to you, and they routinely process your insurance fees and applications. The two types of agents are:

  • captive agent – represent one insurance company, and can only sell you a policy from that one insurer. Examples are State Farm and Allstate.
  • independent agent – may work with multiple insurance companies but legally represent the insurance company, not clients.

Insurance brokers are independent insurance salespeople that represent you, the consumer. In order to find insurance for you, a broker will review rates and coverages of several insurance companies.  They also represent multiple insurers, but their duties go beyond what an agent can do. A broker will thoroughly examine your needs to make sure you have the best possible coverage that’s right for you, with the lowest premiums to fit your budget. It’s their job to save you money. They work for you, not a big insurance company. In short, they’ve got your back.

The terms agent and broker are often used interchangeably, but it’s important to know that some lower-end insurers do not use licensed agents. So when you’re shopping for insurance, whether it’s auto, homeowners, renters, or life, be sure to ask if the person you’re talking to is licensed. (Oh and by the way, Freeway Insurance agents are all licensed insurance brokers, including the helpful people who respond to your web chats.)

Click here to get the right coverage from someone who understands what you need.

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