The distinction between an insurance company and an insurance agent can be quite confusing especially for those who’re new to the world of insurance. Since the two terms are used interchangeably by most of us, the simple answer is the insurance company provides the product while the agency provides the service and the policies associated with homeowners insurance for its clients.
Agents do not set product pricing, underwriting guidelines or discounts and claim procedures. However, they represent many companies, so they get choices for their clients. In doing so, they become trusted advisors to their clients and work for them to match up with the company that best suits coverage, pricing and service needs.
On the other hand, insurance companies are direct writers. They establish their own rates and policies for doing business with insurance agents. However, they can directly sell their policies to clients or may choose to work with an independent homeowners insurance agent.
With independent insurance agents, a consumer can purchase an auto policy with one company, homeowner’s insurance policy with another company, and a life insurance with a third company. This offers flexibility to work with an agent and to get the best rate for each line of insurance. This also gives the benefit of using one agent to manage all your insurance needs. On the contrast, when you work with an insurance company, they don’t offer you flexible pricing options and sell products at the price they have filed with their insurance division.
At a local insurance agency, an agent can only change the policy premium price by adding or removing coverage and cannot go outside of what the insurance company has set forth. Risk factors that determine your price are all entered into the computer and cannot be changed. Typical risk factors include the age of the property, location, and history of claims filed in the past.
Companies are responsible for creating policies and determine what coverage a standard/traditional homeowners insurance policy may include.
Why would you prefer Diverse Insurance Group?
Diverse Insurance Group is a platform of professional insurance agents who assist clients to possess the coverage they need to secure their most prized possessions. Whether it’s your home, life, business or auto, we know how to protect it. Because we are independent agents, we can get the most competitive rates for you through several carriers in Florida.
For further information regarding us, please feel free to contact us at any time including Nights & Weekends.