How it works
There are two main kinds of agents:
- Captive (exclusive) agents represent a single company.
- Independent agents represent several companies and can compare their prices.
Agents are typically paid a commission, which is a portion of the premium the insurer passes to the agent for their work. The insurance industry calls agents and brokers "producers," and both need a license from the state insurance department, which you can check before you buy.
An agent can help you get car insurance quotes, choose coverages and limits, apply discounts, make changes during the policy term and understand the claims process. Because an agent works for the insurer, ask questions until you understand what each coverage does and does not include, and keep copies of everything you sign.
Brokers work differently: they look for coverage on your behalf and, in some states, may charge a separate fee.
Related terms
Sources
- California Department of Insurance, Automobile Insurance Terms agent, commission, producer and license definitions
- California Department of Insurance, Automobile Insurance Text Version agents represent and are paid by insurance companies, brokers charge a fee
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