How does an insurance broker differ from an insurance agent?

The distinction between an insurance broker and an insurance agent is fundamentally rooted in their roles and responsibilities within the insurance marketplace.

An insurance broker operates independently and represents the interests of the client rather than a specific insurance company. This means that brokers work on behalf of individuals or businesses to find the best insurance products and prices available in the market. Since they are not tied to any one insurer, brokers can provide a wide array of options and help clients make informed decisions based on their specific needs.

In contrast, insurance agents represent one or more insurance companies and are authorized to sell policies on their behalf. Agents usually have contractual agreements with these insurers, which means they transact and provide services specifically for the interests of the insurance company, rather than the policyholder.

This fundamental difference highlights that brokers focus primarily on the needs of the client without any allegiance to particular insurers, which can often lead to more customized and competitive insurance solutions for those they represent.