Agent (Insurance)
A licensed professional who sells insurance policies on behalf of insurance companies and helps customers choose appropriate coverage. Agents can be independent (representing multiple companies) or captive (representing only one company).
Example
“John contacted his insurance agent to discuss increasing his auto coverage limits after purchasing a new car.”
Memory Tip
Think 'Agent 007' - they work for someone else (insurance companies) and help you on missions (finding the right coverage).
Why It Matters
Insurance agents provide valuable expertise in navigating complex insurance products, helping consumers avoid costly coverage gaps or overpaying for unnecessary coverage. A good agent can save you hundreds or thousands of dollars by finding the right policy at the best price while ensuring adequate protection.
Common Misconception
Many people think all insurance agents are the same, but captive agents can only sell products from one company while independent agents can shop multiple insurers for better rates. Some also believe agents always cost extra, when in fact their commission is typically built into the premium whether you use an agent or not.
In Practice
Sarah works with an independent insurance agent who shops her homeowner's policy with five different companies. The agent finds her a policy with $300,000 dwelling coverage for $1,200 annually, saving her $400 compared to her previous insurer. The agent earns a 15% commission ($180) from the insurance company, but Sarah pays the same premium whether she uses an agent or buys direct.
Etymology
From the Latin 'agere' meaning 'to do or act,' referring to someone who acts on behalf of another party, in this case insurance companies.
Common Misspellings
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Related Terms
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See Also
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