How does an insurance agent differ from an insurance broker?

An insurance agent differs from an insurance broker primarily in terms of whom they represent. An agent acts on behalf of one or more insurance companies, meaning they are authorized to sell and service policies for those specific insurance providers. This relationship allows agents to have a deep understanding of the products they are selling and provides a streamlined process for clients purchasing that insurance.

In contrast, a broker represents the insured, which means they work on behalf of individuals or businesses seeking insurance coverage. Brokers are typically not tied to any one insurance company and can shop around from various insurers to find the best policy that suits their clients' needs. This independence allows brokers to provide a wider range of options and negotiate better terms for the insured.

Understanding this distinction is crucial for both consumers and professionals in the insurance industry, as it influences how they navigate purchasing decisions and client relationships. The other options suggest relationships or roles that do not accurately reflect the respective functions of agents and brokers in the insurance marketplace.