Many people have trouble determining what the difference is in an insurance company versus an insurance agency, especially since the two terms are sometimes used interchangeably.
The simple answer is: one is part of a whole. Any major insurance carrier brand names you recognize from television are companies. The insurance companies are comprised of many different agencies. The company provides the product while the agencies provide the service and distribute the product (the insurance policies) among the customers.
Some agencies may offer policies from several different companies. There are two types of insurance agencies: exclusive agencies and independent agencies. Exclusive insurance agencies sell products for only one company or brand.
For instance, a State Farm exclusive agency cannot sell Traveler's or Allstate insurance. However, an independent agency works as a contractor for several different insurance companies and can offer policies from many different insurance carriers.
At an independent agency, you could purchase a homeowner's policy with one company, an auto policy with another company and a life insurance policy with a third company. This allows you to get the best rate for each line of insurance while still having the benefit of using only one agent to manage all your business.
An insurance agent can only change the price of a premium for a policy by adding or removing coverage- and for commercial insurance, by changing values, descriptions or limits.
Policies are created by the insurance company. The insurance company determines what coverage a standard policy may include. Within those definitions, a policyholder will find detailed information about what types of loss the insurance company will cover and what types of loss it will not cover. There may also be limits to how much will be paid out for certain types of loss.
While an insurance agency may write policies for their clients, they are not able to add or remove coverage from any given policy outside of what the company has set forth. An insurance agency cannot determine what type of losses will or will not be covered under any given policy as that is also laid forth by the company.
Hopefully this helps you to better understand just what we do as an insurance agency for our clients here at Trinity Insurance Services.
Once again, we thank you for choosing Trinity Insurance Services for all of your commercial trucking insurance needs!