Insurance agents are independent contractors, authorized by certain insurance companies to sell their insurance products to customers. You can insure just about anything, from your car, house, life, loss of earnings, loss of rent, to medical bills, legal fees, personal injury, and professional negligence.
What they do
They usually represent a number of companies, sometimes using intermediaries, to obtain a large number of quotes so that they can advise their customers as to the most appropriate policy for them.
Agents receive commissions from the relevant insurance company when a policy is sold, and these can amount to as much as the whole of the first year’s premium, depending on the policy and the company.
Under New York State law, agents are obliged to disclose the amount of commission receivable from each insurance company. However, in many other states, they only have to disclose, if asked, that a commission is payable and not the amount.
To protect yourself and ensure that your agent won’t be pushing a policy on you because of the likely return for him, you should always find out as much as you can from agents about their commission.
The insurance market is so large and so competitive that it may be worth going to a specialist insurer, especially if your needs are slightly more complex. For example, seniors or those with serious medical conditions may need more protection than your standard insurance policy can offer. It’s also worth bearing in mind that you can buy policies directly from insurance companies themselves, which may be useful if you are worried about a markup and are prepared to shop around yourself.