What Is The Difference Between An Insurance Company And An Insurance Agency?
For someone new to the insurance industry, a lot of words get thrown around that can be confusing and are often times misused. A common example is using the terms insurance company and insurance agency interchangeably. However, these are two different types of businesses that provide unique services to the consumer. This blog post will try to explain the differences so you are more informed the next time you are buying insurance!
An insurance company is the business that provides actual insurance products. These are the household names that most people will recognize (Progressive, Travelers, Geico, and the list goes on). Most of these companies insure all different types of things, including your home and car. And by providing these services, they are the ones that receive your premiums. In the unfortunate event that you need to report a claim, the insurance company is the one that pays you for your loss.
On the other hand, an insurance agency acts as an advisor. They act as the middleman between the consumer and an insurance company and do not insure anything themselves. The consumer uses an independent agent to help find the best insurance products offered from all insurance companies. They help translate insurance policies into layman's terms so the consumer can better understand it. Their job is to make insurance as easy as possible for the consumer, while making sure they are insured at the best price.
While the two provide different types of services, they act in tandem. Insurance companies and insurance agencies help make up the majority of the insurance industry.
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