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What is the difference between an insurance broker and an insurance agent? I thought they were the same thing?

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  Answers  |  2

February 01, 2016

Technically, they are not the same thing. Practically, they aren't either. Most people use the two terms interchangeably, but insofar as a state's department of insurance is concerned, I have seen wording that tells us that brokers are focused on the client's objectives and have no special allegiance to one insurance carrier’s objectives, which implies that we sell more than one carrier's products. Agents, however, are usually "captive" and sell only the products of one carrier. It also implies that they would be expected to look out for the good of the company to which they belong, and that may trump looking out for the customer sometimes. I have been both an agent and a broker, and prefer the broker approach because I believe that when a prospective client's expressed desires fall outside of my current offering, I should be able to find what they desire and provide it for them. It happens often enough that someone wants xy or z and we go and get it for them if we don't "stock" it. The alternative would be that I would have to fit them into what I have and sometimes, as an agent, I might not have that thing in my portfolio of products. Sometimes, I might. I personally purchase certain types of coverage from agents. Why? Because they have exactly what I need, their service is great, and the price is right.

Usually, you hear Brokers referred to as "Independent Agents." In that phrase, "agent" means that we are acting in behalf of each of the multiple carriers that we are contracted with. Keep an eye on the Independent part, thought, since that is the key word. is an independent brokerage. Our other companies are independent brokerages offering health insurance, property casualty coverage, etc. Put short, we can sell anything. The world is a big place and customers need many things. As an independent, I can query my client on what is desired or needed - and no matter what they tell me, if it exists and is ethical and practical, I'll find it so they don't have to be squeezed into what is "on the shelf" at the moment. Is that a kick against agents? Nope. Some people want to connect to that distribution model for reasons of their own, as I mentioned. You should go check out both. See what you think. At the end of any given day, that is what it will come down to since you are the customer.

For additional info, see the article at MoneyTips titled: Pros and Cons of Using an Insurance Broker/Agent (


$commenter.renderDisplayableName() | 09.20.20 @ 05:12


February 02, 2016

In my experience with property and casualty insurance polices the brokerages that I work with are wholesalers. This means they sell to the retail agent and the retail agent sells to the end user (insured). An agent or broker can only offer what the insurance company offers. Brokers have no more ability to manipulate or change terms of a policy to meet a customers needs than an agent. An agent is contracted to represent a company in his or her local market, whether the agent is captive (sells for one company) or independent (sells for many companies). At the end of the day, the insurance companies dictate coverage and price.

I am a captive agent with the ability to sell for many companies if the main company I represent has no desire to insure a particular risk. I guess I could be considered a broker, but I wouldn't use the term based on my experience with other brokers.

The main items you want to look for in an agent or broker are trust, ease of doing business, and chemistry. Most of us know when we have found a company or person we like doing business with, who also has a good product at an acceptable price.

Ted Miller
TMJ Group Insurance
Madison AL

$commenter.renderDisplayableName() | 09.20.20 @ 05:12