Sometimes called an insurance brokerage or independent agency, an insurance agency writes, solicits and binds policies through different insurance companies to the general public. Insurance agencies are not directly employed by a specific insurance carrier. Agencies decide what insurance carriers they will represent and what products they are going to offer which allows clients to get the best coverage for the best price.

There are about 38,500 independent agencies in the U.S. and generate 5 to 6 million dollars in annual premiums.

When you walk into an insurance agency to purchase a policy, the agency will find the insurance carrier with the best price. The agent will help in the application process, answer questions about coverage, and help the client with a claims process if they are involved in an accident.

Agency Authority

An insurance agency has contract of representation with an insurance company. The contract allows the agency to get coverage from a company for a customer. The agent ensures that the insurance needs of the customer are met and then put into motion in a reasonable and agreed on time frame.

An agency has to be licensed by law if it performs one or more of the following;

  • Solicits applications on behalf of a health maintenance organization
  • Delivers or receives a policy of insurance
  • Inspects or examines any risk
  • Receives, transmits, or collects a premium
  • Performs anything in the consummating or building of an insurance contract

A health insurance company’s main function is to provide businesses and individuals help in maintaining a health plan. The insurance companies help the consumer find the right plan by comparing providers as well as ensuring the policy meets the consumer’s needs.