There are two basic types of insurance agents, those who work directly for an insurance company, called captive or dedicated agents, and those who work for the insurance buyer, called broker or independent agents. Captive agents do not offer customers a choice of insurance carriers, being legally obligated to sell policies only for the company they work for. Brokers sell insurance for several different insurance companies, and have the ability to offer customers a choice of which company they wish to buy from.
Insurance brokers work for their customers. If the customer has a few tickets on their driving record, or a less than perfect credit record, the broker will compare prices between multiple companies to find the policy that offers the most coverage at the lowest price. For the broker, the customer, not the insurance company, is the source of income.
An insurance broker needs your business. They will help you find discounts that you werenâ€™t aware of, and suggest changes in your policy that eliminate unnecessary coverage. The insurance broker literally depends on selling policies to stay in business, and will often work with you to get the best coverage at the lowest price. A captive insurance agent is going to get paid whether you purchase a policy or not, and will often receive bonuses or incentives for selling more expensive policies, including omitting eligible discounts or convincing customers to purchase coverage or riders that they donâ€™t really have a use for.
If you are shopping online for a new insurance policy, take note of the difference in rate quotes between websites that only offer insurance from one company and companies that give you a choice from among multiple companies. Dedicated agents tend to be less flexible and to charge higher rates while brokers will try to find options that meet your needs, playing the part of an insurance advisor to make sure you have the auto coverage you need without wasting money on options that you may never use at all.