Understand the Difference an Insurance Company and an Insurance Broker

Brokers are not insurance companies; they are independent insurance salespersons.  The broker represents you, the client.  In order to find insurance for you, a broker will usually review the premium rates and coverages of several insurance companies. Brokers do charge a broker fee for their service.

A broker will usually have the words “insurance agency,” “insurance brokers,” “insurance brokerage,” or “insurance services” in it’s business name.  An insurance company is responsible for paying any claims you have; a broker is not.  An insurance company will usually have the word “insurance company, casualty company, “indemnity company,” “insurance underwriters” or “assurance company” in it’s name.

Some insurance companies will use the services of another business, called a “managing general agent” or “general agent.”  These businesses may perform underwriting, claims handling and billing on behalf of the insurance company issuing the policy.