What’s the Difference? Insurance Companies vs. Insurance Agencies
People often interchange the terms ‘Insurance Company’ and ‘Insurance Agency’. It may seem pretty obvious to some, but not everyone knows the difference between the two. Do you need to work with both businesses? Are they completely separate entities? What do they do for one another? We’re here to put to rest any questions you might have.
Insurance Companies
Rather than thinking about these two businesses as separate entities, we should look at them as partners. Think of the insurance company, or carrier, as a manufacturer. They are the ones who produce the “product”, in this case the insurance policies. They create and administer the policies and pay claims.
Insurance Agencies
So if the insurance company is the manufacturer, what would that make the agency???
Right! Think of the insurance agency, or independent agent, as the retail store. They are the ones who sell the product that the company (manufacturer) produces. They are the friendly face that maintains contact with customers. Insurance agencies obtain quotes from the insurance companies to present to the customers and assist customers in filing claims with their insurance companies. Unlike a retail business, however, insurance agents are customer allies, searching for the lowest rates and best policies for each customer’s needs.
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