If you’re considering a career in insurance, you’ve probably seen the terms insurance agent, insurance broker, and insurance producer used interchangeably. While they all work in the insurance industry, they don’t always mean the same thing.
The biggest difference comes down to who they represent.
- Insurance agents generally represent one or more insurance companies.
- Insurance brokers represent the client who is purchasing insurance.
The good news for anyone exploring an insurance career is that the licensing process for insurance agents and insurance brokers is typically the same. In most states, both roles require the same state insurance producer license.
Here’s what you need to know.
Insurance Agent vs. Insurance Broker at a Glance
| Insurance Agent | Insurance Broker |
|---|---|
| Represents the insurance company (carrier) | Represents the insurance buyer (client) |
| Sells insurance policies offered by appointed carriers | Shops multiple insurance markets to find suitable coverage |
| Can often bind coverage on behalf of a carrier | Usually works with carriers or wholesalers to place coverage |
| Paid through commissions from insurance companies | Compensation may come through commissions or fees, depending on state law and business model |
| Must be licensed | Must be licensed |
Although their day-to-day responsibilities differ, both professionals help consumers obtain insurance coverage and must meet their state’s licensing requirements.
What Does an Insurance Agent Do?
An insurance agent sells insurance policies on behalf of one or more insurance companies. It’s important to note that agents only recommend and sell products from the companies they represent. They are not shopping the market as a whole or looking at every carrier’s products.
Agents educate consumers about available coverage, answer questions, recommend policies, complete applications, and often assist throughout the life of the policy.
Depending on how they work, an agent may:
- Sell auto, home, life, health, or commercial insurance
- Explain policy options and coverage limits
- Help customers compare products offered by their appointed carriers
- Assist with policy changes and renewals
- Serve as the primary point of contact between the customer and the insurance company
Many agents can bind coverage immediately because they have authority from the insurance companies they represent.
What Does an Insurance Broker Do?
Insurance brokers work on behalf of the insurance buyer rather than a specific insurance company.
Instead of selling only the products of one, or a handful carriers, brokers evaluate a client’s insurance needs and search multiple insurance markets to identify appropriate coverage options.
A broker may:
- Analyze a client’s risks
- Compare policies from several insurance companies
- Recommend coverage based on the client’s needs and budget
- Negotiate with carriers
- Help place difficult or specialized insurance risks
Because brokers work with multiple carriers, they often have access to a broader range of insurance products.
Do Insurance Agents and Insurance Brokers Need Different Licenses?
Simply put: no.
One of the biggest misconceptions is that agents and brokers earn different licenses. In reality, the licensing path is generally the same.
Both insurance agents and insurance brokers typically must:
- Meet their state’s licensing requirements.
- Complete any required pre-licensing education.
- Pass the state licensing exam.
- Submit a license application and background check when applicable.
- Maintain the license through continuing education and renewals.
States generally issue an insurance producer license, which allows an individual to sell, solicit, or negotiate insurance. Whether that licensed producer ultimately works as an agent or a broker depends on their employer, appointments, and business model, not on any specific license.
Because licensing rules vary by state, always check with your state’s insurance department for specific requirements.
What Is an Insurance Producer?
The term insurance producer is the official licensing term used by most state regulators, educators, and governments. It is more commonly used within the insurance industry (rather than by the public).
The National Association of Insurance Commissioners (NAIC) adopted the producer model to simplify licensing terminology across the industry.
An insurance producer is anyone licensed to:
- Sell insurance
- Solicit insurance
- Negotiate insurance contracts
Both insurance agents and insurance brokers fall under this broader category.
That’s why you’ll often hear insurance schools, regulators, and state licensing agencies refer to producer licensing rather than separate agent or broker licensing.
Captive Agent vs. Independent Agent
Not all insurance agents work the same way.
Captive Insurance Agent
A captive agent represents a single insurance company.
Examples include agents who work exclusively for one national carrier. Because they focus on one company’s products, they often become experts in those policies and underwriting guidelines.
Pros:
- Deep knowledge of one carrier
- Strong company support and training
- Streamlined underwriting process
Cons:
- Limited product selection
- Cannot shop competing carriers
Independent Insurance Agent
Independent agents represent multiple insurance companies. This allows them to compare policies from several carriers and recommend options that best fit a customer’s needs.
Pros:
- Greater choice for customers
- Ability to compare pricing and coverage
- Helpful for complex or specialized risks
Cons:
- Must stay current on multiple carriers’ products and underwriting requirements
Which Career Is Right for You?
Both insurance agents and insurance brokers can build rewarding careers helping individuals and businesses protect what matters most.
If you enjoy building long-term client relationships and working closely with one or more insurance companies, becoming an insurance agent may be a great fit.
If you prefer evaluating multiple insurance markets, comparing coverage options, and advocating for clients throughout the buying process, a brokerage career may be appealing.
The important thing to remember is that both careers begin with the same licensing process in most states. Once you’re licensed as an insurance producer, your employer, appointments, and business model will determine whether you work as an agent, broker, or another type of licensed insurance professional.
Frequently Asked Questions
Is an insurance broker better than an insurance agent?
Neither role is inherently better. Insurance agents represent insurance companies, while insurance brokers represent insurance buyers. Each serves a different purpose depending on the customer’s needs.
Do insurance agents and brokers have the same license?
In most states, yes. Both obtain an insurance producer license and complete the same licensing requirements established by their state’s insurance department. The process looks like this: use All-Lines Training’s courses to prepare for your license exam, then register and pass the state exam. After passing, you’ll apply for your license and pay your fees. Once you have your license in hand, you can make the choice to apply for either agent or broker positions, and move forward with your career accordingly.
Can an insurance broker sell insurance?
Yes. Licensed insurance brokers help clients obtain insurance coverage by working with insurance companies and placing policies that meet the client’s needs.
What is the difference between an insurance producer and an insurance agent?
Insurance producer is the general licensing term used by most states. Insurance agent describes a specific type of producer who represents insurance companies. Insurance brokers are also licensed insurance producers. But both agents and brokers fall under the term “producer”.
Start Your Insurance Career
Whether your goal is to become an insurance agent, insurance broker, or another type of licensed insurance producer, your first step is earning your insurance license.
All-Lines Training can help. We have exam prep and pre-licensing courses that will move you towards the next step in getting your state license. Check out your state licensing page to see what courses are available. Scroll further down the page to see the state FAQ section with instructions and information.
