Agent (Insurance)
A licensed professional who sells insurance policies on behalf of insurance companies and helps customers choose appropriate coverage. Agents can be independent (representing multiple insurers) or captive (representing one company).
Example
“John contacted his insurance agent to add his teenage daughter to his auto policy and discuss available discounts.”
Memory Tip
Think 'Agent = Acts for you' - they act on your behalf to find and sell insurance coverage that meets your needs.
Why It Matters
Insurance agents provide valuable guidance in navigating complex insurance products and can help you find coverage that fits your budget and needs. They also assist with claims and policy changes throughout the life of your coverage.
Common Misconception
People often think agents work for the customer, but they're actually paid by insurance companies through commissions. While good agents prioritize customer needs, their compensation comes from the insurers whose products they sell.
In Practice
When Sarah needed homeowners insurance for her $300,000 house, her agent compared policies from three companies. Company A offered $250,000 dwelling coverage for $1,200 annually, while Company B provided $300,000 coverage for $1,350. The agent explained the coverage differences and helped Sarah choose Company B, earning a typical 10-15% commission ($135-200) from the insurer.
Etymology
From the Latin 'agere' meaning 'to do' or 'to act,' referring to someone who acts on behalf of another party. The term has been used in insurance since the industry's early development in the 17th century.
Common Misspellings
Compare insurance quotes and save
Related Terms
More in insurance
Other insurance terms you should know
See Also
Need financial definitions?
Clear definitions for 2,500+ finance, insurance, and investing terms.