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Insurance agent vs. insurance company: What's the difference?
Insurance companies and insurance agents are both in the business of selling insurance, but with different roles. Insurance companies (also called carriers, providers, or insurers) provide the products, while independent agents act as intermediaries between customers and the carriers.
What are insurance agents and insurance companies?
Although insurance companies and insurance agents are both important to the industry, they have very different roles and responsibilities.
An insurance company is the manufacturer, like a chef preparing dishes in the kitchen.
An independent insurance agent like Insureon is the distributor, like a server who comes to your table, explains the menu options, and helps you select the dishes that best meet your needs.
When purchasing insurance, it’s important to understand how independent agents and insurance providers work, so you can connect with the right people and purchase the right coverage.
What is an insurance agent?
An insurance agent is an insurance professional who works on behalf of an insurance company to connect customers to the right insurance solutions while earning commission on each sale. Unlike an insurance broker, who represents the customer in their search for coverage, an agent represents the carrier.
There are two types of insurance agents:
- Captive agents exclusively represent a single insurance company, acquiring extensive knowledge about that carrier’s products and offerings.
- Independent agents represent multiple insurance companies, allowing them to shop around and compare policies and premiums to find the right policy for a client.
Whether you choose to work with a captive agent or an independent one, you can expect any insurance agent to typically handle:
- Evaluating your insurance needs and budget
- Advising you on the best policies from their carrier(s)
- Explaining policy terms, conditions, and deductibles
- Helping with the application process and initiating a policy
- Providing support to answer questions, renew policies, and submit a claim
What is an insurance company?
An insurance company, also known as a carrier, provider, or insurer, is a business that provides insurance coverage and carries the financial risk for a policyholder in exchange for regular payments, called premiums.
Typically, an insurance provider handles:
- Creating and pricing insurance policies
- Underwriting policies
- Collecting premiums
- Paying out qualifying claims
Even if you find coverage through an independent agent or broker, once you purchase a policy, you’re entering into a contractual agreement directly with the insurance carrier.
Important clarification: People often use the name of their independent agent as their insurance provider. This is incorrect. The agent is the local representative who works for the insurance carrier that provides the insurance.
For example, Insureon is the #1 digital independent agency for small businesses. When you work with one of our licensed independent agents, they help you find the best coverage for your small business from one or more of the top-rated insurance providers we represent.
How does an independent insurance agent differ from an insurance company?
Here’s a breakdown of the key differences between an insurance agent and an insurance company:
| Insurance agent | Insurance company | |
|---|---|---|
Responsibilities | Selling policies | Underwriting policies |
Types of products sold | Policies from insurance company/companies | Its own policies |
Compensation | Earns commission from carrier(s), can earn salary from carrier or insurance agency | Collects premiums from policyholders |
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Do insurance agents work for insurance companies?
When it comes to employment, insurance agents have a few options for where to work, including:
- Independent agencies: A lot of independent agents work for agencies, work as independent contractors, or start their own agencies to represent many different carriers and sell policies based on their clients’ unique needs.
- Direct carriers: Large insurance companies often have exclusive agents on staff to sell their insurance products.
Should I buy directly from a company or through an independent agent?
If you’re looking to buy insurance, you can work directly with a carrier, or you can work one-on-one with an independent agent to find the best policies. Before you make your decision, here are some things to consider:
Buying insurance through an insurance agent
Pros
- Provide personalized guidance and tailored coverage
- Compare quotes from multiple carriers (independent agents)
- Negotiate better rates
- Explain complex policy details
- Provide support during the claims process
Cons
- Captive agents only represent one carrier, limiting coverage options
- May experience delays if the agent is unavailable
- Commissions could slightly increase premiums
Buying insurance directly from an insurance company
Pros
- Provide speedy service
- Offer potentially lower rates with no agent commission or broker fees
- Streamline the application process
Cons
- Can’t provide customized advice
- Can only provide their own products and prices
- Can’t tailor coverage
- Customer has to handle the application and claims processes on their own
Why choose Insureon as your independent insurance agency
As the top digital agency for small business insurance, Insureon will work with you to find the best coverage from the best carriers, including The Hartford, Hiscox, and Philadelphia Insurance Companies.
- Understanding your business and your budget
- Identifying your unique risks
- Comparing custom quotes from top-rated carriers
- Providing free, expert advice from licensed insurance agents
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Get affordable insurance quotes and buy online with Insureon
One of the best ways to save money on insurance is by comparing rates from different providers—and Insureon operates the largest online marketplace for small business insurance in the United States.
Save valuable time and money by filling out our online application that retrieves quotes from top-rated carriers. Most business owners can get coverage right away, with same-day access to a copy of their certificate of insurance (COI).
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Insurance agent vs. broker: What’s the difference and how to find the right one
Both insurance agents and brokers are licensed professionals who help small businesses secure coverage. But while an agent represents a small number of insurance providers, a broker works with a variety of carriers. Understanding the difference can help your business find the right partner.
Updated: January 28, 2026
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