How is an insurance agency different from an insurance carrier?

For someone who is not accustomed to the knowledge of insurance agencies, carriers, and companies, it can get quite confusing when these terms appear on their insurance papers. A lot of people generally get confused between an insurance ‘agent’ and ‘carrier’ as they might serve the same purposes but are poles apart from each other. There are many insurance companies in Texas that will give you a detailed explanation on this topic, especially the Rowlett insurance companies. We will discuss this topic in brief, but before that, it is important to understand the basic difference between the two.

An insurance carrier can be thought of as the manufacturer of products and services that employs agencies under it to sell these products and services to different insurance companies. An insurance agency, on the other hand, can be thought of as a retailer or broker whose job is to bind different policies of various companies and then sell it to the end consumer. Here, an important point to note is that an agency is independent to choose any insurance carrier to suit the needs and requirements of the end consumer.

Insurance Carrier

An insurance carrier is a manufacturer of insurance products and services (Insurance policies) that is sold by the insurance agency to other insurance companies, insurers, etc. They are the wider branch of the insurance tree, and insurance agencies come under them. An insurance carrier has total control over the various legal processes regarding the insurance product, such as underwriting processes, claim processes, pricing, and overall management. They do not hire a particular agent to work for them; instead, they outsource this job to independent agencies.

The Salient Features Of An Insurance Carrier Include:

Jobs such as collecting premiums, paying claims, renewing policies, etc.
Responsibility of designing and administering the insurance products
Introduce new changes to the products or services
Handling and answering all the customer queries.

Insurance Agencies

An Insurance Agency is a part of the distribution channel that the insurance carrier creates to sell their products and services. Insurance agencies are also known as insurance brokers whose job is to bind the policies through various insurance companies. They serve as a link between the carrier and the customer. An insurance agency does not bear any risk on a policy that is written to the customer. Their main focus is on the customer to get them the best policies in the minimum prices. They work on a commission.

There Are Two Types Of Insurance Agencies:

Independent Agencies
Captive Agencies

An independent agency is not directly employed by a particular insurance carrier to sell its products. The agency can decide according to them which insurance carriers they would like to represent and which products from their brand they would like to sell. They are under no direct obligation.

Captive agencies are bound to sell products and services of a company that they are working under irrespective of it not being in the best interest of the customer.

For more details about finding the best insurance solutions in Rowlett, visit https://www.costlowinsurance.com/

Costlow Insurance Group, Inc.
3521 Main St. #100
Rowlett, TX 75088
972-463-8043

https://www.facebook.com/pages/Costlow-Insurance-Group/153779194682709
https://twitter.com/CostlowInsGroup
https://www.youtube.com/channel/UCe9HGIH6zaFmCFcxdJRv2NQ