An insurance agent or broker is someone who represents the insurance company at the retail level, their job is to engage with customers and offer choices to the prospective buyer that meet their insurance needs.
The insurance agent works with the client to collect raw data for risk analysis on their policy, and also to complete all the complex paperwork necessary to appropriately underwrite that risk with a suitable policy.
Most jurisdictions have very specific requirements with respect to this documentation, in terms of layout, content, printing, etc. and it is the insurance agent’s responsibility to make sure that all the legal obligations are met in an appropriate manner.
Insurance brokers can also assist with complex insurance situations where a combination of policies from different insurers may make more sense than a single large scale policy, for example in fleet auto insurances arrangements.
What are the conditions for insurance agents in the United States?
Each state issues individual broker licenses, and the insurance agency business in the United States is highly regulated. In order to make life easier for brokers, most states have agreed reciprocity deals which enable a licensed broker in one state to become a licensed broker in another state relatively easily. In fact much of the licensing requirements between states have now been harmonized and the applications for a license can be handled electronically.
Smaller agents can compete on a level playing field with larger firms, because laws are in place preventing large scale brokerages from offering customers rebate incentives and/or additional discounts on pricing policies of the insurers themselves.
Licensing ensures that customers get fair and equitable representation from brokers and agents in the United States and that the level of service they receive is of a sufficient standard.
What do insurance agents help customers with?
Insurance agents offer significant help for both individuals and companies, in that they research and locate more competitive offers than would perhaps be found if approaching an insurer direct.
Is there a difference between an insurance agent and an insurance broker in the United States?
There is no legally defined separation between the two roles, however in practice an agent is often the agent-principal for an insurer and their relationship is defined in terms of the insurance carrier rather than the buyer. A broker has no contractual agreements with carriers, and relies on other methods of sourcing insurance for their clients.