There's a lot to consider when you're buying insurance, and an insurance agent is usually the person who helps you find the coverage you need. However, insurance agents have limitations and may only be able to sell you products from the insurer they represent. So it's important to compare prices and policies from more than one company and to understand all of the options you have for purchasing anything from car insurance to homeowners insurance.
Below, CNBC Select shares what you need to know about insurance agents and the role they have when it comes to purchasing insurance.
Insurance agent guide
- What is an insurance agent?
- Insurance agent vs. insurance broker
- Do you need an insurance agent?
- Is it cheaper to buy insurance online or through an agent?
- FAQs
- Bottom line
What is an insurance agent?
An insurance agent is an insurance provider's representative or employee. Agents act as salespeople and provide customer service when you need to adjust coverage or require help navigating the claims process. Sometimes insurance agents offer a variety of coverages — other times, they specialize in a specific insurance category, such as homeowners insurance, auto insurance or life insurance.
There are two types of insurance agents: Captive agents and independent agents. A captive agent (also called an exclusive agent) is an employee or contractor with a single insurance company. Independent agents can sell products from more than one insurance company.
Insurance agent vs. insurance broker
The main distinction between an insurance agent and an insurance broker is that an agent works for an insurance company (like Nationwide or Farmers) and a broker works for you, the consumer. Insurance brokers work with multiple insurers to help you secure the coverage you want. An agent may work for a single insurance company or, if it's an independent agent, may be able to help you secure coverage from several different providers.
An insurance broker is helpful if you want to compare policies from many different insurance providers. They help you price shop and analyze different types of coverage. Insurance brokers are paid commissions from the insurance company and could charge broker fees, although many do not.
Insurance agents work with a specific company, or companies, and can offer products from the providers they represent. Agents typically get paid on commission, though sometimes they also receive a salary. And an agent can also have access to specific products not available to insurance brokers. If you know exactly what type of insurance you need or what company you want to purchase insurance from, it can make sense to work directly with an insurance agent.
Do you need an insurance agent?
You may not need an insurance agent to purchase insurance but it depends on the insurance company. For example, you can buy insurance directly from both Geico and Progressive. However, other providers only sell insurance through agents.
Geico Auto Insurance
Cost
The best way to estimate your costs is to request a quote
App available
Yes
Policy highlights
Geico coverage and services are available in all 50 states and the District of Columbia and there are 16 different types of discounts available. In addition to the standard coverage options, Geico offers various optional add-ons, such as emergency roadside assistance, rental car reimbursem*nt and mechanical breakdown insurance.
Terms apply.
Read our Geico Auto Insurance review.
Progressive Auto Insurance
Cost
The best way to estimate your costs is to request a quote
App available
Yes
Policy highlights
Progressive offers a number of lines of insurance to allow for bundling, and convenient tools to help you keep your coverage in your budget.
Terms apply.
Read our Progressive Auto Insurance review.
When you're working with an insurance broker, you're not directly working with an agent, but an agent will still be a part of the process. This is because insurance policies you secure through an insurance broker still need to be finalized by the insurance company's agent.
Is it cheaper to buy insurance online or through an agent?
It could be cheaper to buy insurance online directly from the insurer. For example, Progressive offers a discount when you get a car insurance quote online, even if you finalize the transaction with a phone call. But online discounts aren't necessarily a standard practice. Many insurers don't sell directly to consumers and your options for purchasing insurance could vary depending on your state of residence. Also, when you buy insurance online you could be buying the policy through an agent or may need to contact an agent to finalize the transaction.
Even if one company offers an online discount, that doesn't guarantee you're getting the best deal, so it's always important to shop around. You may find an agent or broker who can offer a better price for the same level of coverage. There's also value in working with a local agent or broker you trust because their expertise can help you decide on the best coverage amounts and types of insurance for you.
FAQs
What's the role of an insurance agent?
Insurance agents are salespeople for insurance providers. Their role is to help find insurance customers and to help those customers find the right types of coverage for their needs.
How do I know if I'm getting the best price on my insurance policy?
One of the best ways to ensure you're getting the best deal on your insurance policies is to shop around. When you're comparing rates from different providers, but sure to compare policies that provide the same level of coverage. Otherwise, you could end up with a cheaper policy that lacks the protection you need.
What's the difference between an insurer and an insurance agent?
An insurer is the company that underwrites insurance policies and pays out insurance claims. An insurance agent is a representative of the insurer. Insurance agents are the people who sell the insurers' products.
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Bottom line
Making sure you're getting the right insurance at the best price for your boat, car and other needs can be complicated. An insurance agent can help you understand what types of insurance are available and help you find the best fit for your needs. However, agents are limited to offering products from one company or a handful of companies they represent. So it's important to shop around and compare policies from several providers to ensure you're getting the best deal.
Why trust CNBC Select?
At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Our insurance advice is based on rigorous reporting by our expert writers and editors. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics.
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Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.
