Many individuals discuss purchasing insurance regardless of the insurance type they need including homeowners, renters, auto, or health insurance. And it’s usually insurance companies that receive the most attention. Also, you can get insurance through an insurance agency to help you get suitable and beneficial coverage. But the question remains what’s the difference between an insurance agency vs. an insurance company?
Understanding what’s the difference between insurance agency vs. insurance company is beneficial if you need assistance in purchasing insurance policy. The main difference is that an insurance company manages and underwrites insurance policies while an insurance agency sells insurance under the insurance company. In this article, we will discuss what’s the difference between an insurance agency vs. an insurance company, benefits and drawbacks, and more.
What is Insurance Agency
An insurance agency, also known as an insurance agent is a person or company that has been given authorization by a provider to sell insurance products. These agents are been govern by the laws of the state where they perform tasks. Since not every insurance agency is similar, they are categorized into two types including independent agents and exclusive agents. Captive or exclusive agents are individuals who only sell products from one insurer, while insurance agents are individuals who sell products from many insurers.
Pros and Cons of Insurance Agency
Insurance agency provides unique value because of their efficiency in getting multiple policies from various companies. Rather than being pressured to select from the limited choices offered by one insurer, you can select the main policy that suits your needs. This includes sufficient coverage, low cost, specific riders, and more.
Also, customers that need multiple coverage types like home and car insurance can find significant worth from insurance agencies. Since most agencies specialize in specific aspects of insurance, others promote themselves as full-service providers. This is because agencies are in a good position to merge policies to obtain the best deal.
What is Insurance Company
An insurance company also known as an insurance carrier or provider is a company that sells insurance products to clients. This provider is the one that underwrites the policy, receives monthly payments from the policyholder, and reimburses funds for any accepted claims. Various popular insurance companies offer both home and car insurance. This may include Progressive, Travelers, Allstate, Nationwide, Mutual, and Liberty.
Pros and Cons of Insurance Company
Since you know what an insurance company is all about, how about we discuss the pros and cons to gain more knowledge about it? In addition, there are the major points to consider.
If you don’t want optional quotes, you can only work with one company at a time. Also, if you know what you need and don’t need a lot of optional coverage, buying directly from an insurance provider can be quick and easy. However, you would need to weigh and find the ideal policy by yourself and a direct writer insurance provider might not delay to discuss difficult terms.
When to Consult an Insurance Company or Agency
Generally, you and your insurance company will not be able to speak much. You can only consult your insurance agent and discuss the cost or file a claim. Most insurance agent offers assistance with every process of getting insurance, including contacting your insurance company if you:
- Want to understand more and have any inquiries about your current coverage?
- If you want to know when you are to file an insurance claim with your insurance company.
- Need to change your insurance policy.
- Would like to get a new policy or switch to a different provider.
Insurance Agency vs. Insurance Company: What’s the Difference
When talking about insurance policy, you can consider insurance company is the one that produces the products and you can choose from it while an insurance agency is said to be the same as a retail shop. Furthermore, the following is what’s the major difference between insurance policy vs. insurance company.
Responsibility
Insurance providers are in charge of handling policy claims, rates, and total management of insurance plans. However, selling of policies and supporting policyholders with questions and issues are the responsibility of the insurance agency.
Premium collection
Insurance companies do not take premium payments on the insurance provider’s behalf. However, the workcomp provider gets the premiums that your plan requires. Lastly, policy changes are initiated and accepted by the insurance company and not the agency.