An insurance agent in the health, automobile, life or any other insurance sector is a professional who represents one or more insurance companies and sells their products to consumers. Agents are either “captive,” meaning they represent a single insurer, or “independent,” representing multiple insurers. When you contract an insurance plan through an agent, they will guide you through the selection process, helping you understand the different plans available, their benefits, and costs, and assist you with the application process.
Contracting Through an Agent vs. Directly
Contracting a plan through an agent is not exactly the same as contracting directly through the insurance company for several reasons:
- Personalized Service: Agents often provide personalized service, helping you navigate the complexities of insurance policies to find the one that best suits your needs.
- Plan Comparison: Independent agents, in particular, can compare plans from multiple insurers, offering a broader view of your options than you might get from a single insurer.
- Cost: The cost of the insurance plan usually includes the agent’s commission, but this doesn’t necessarily mean higher prices for you. Insurance companies typically factor in these commissions into their pricing, whether you buy through an agent or directly. Therefore, bypassing an agent does not usually result in lower premiums for the consumer.
Insurance Agent vs. Broker
The difference between an insurance agent and an insurance broker lies in whom they represent. An agent represents one or more insurance companies and sells their products, while a broker represents the insurance buyer. Brokers work on behalf of clients to find the best insurance policy among various companies they are not directly affiliated with, potentially offering a wider range of options.
How Many Companies Are Represented by Each Insurance Agent?
The number of companies represented by each insurance agent varies. Captive agents represent just one company, while independent agents can represent several insurers. The exact number depends on the agent’s business model, agreements with insurance companies, and the range of products they want to offer.
Should I Skip the Agent?
As for bypassing the agent to contract your plan, it’s indeed possible with many insurance companies offering direct purchasing options through their websites or customer service centers. However, this doesn’t necessarily mean you’ll pay less for your insurance plan. The primary advantage of going directly through the insurance company may be dealing with them directly throughout the entire process, but the prices are generally the same because insurers have pricing structures that account for commissions, whether or not an agent is involved in the sale.
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