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Insurance Agency

Insurance Agency

An insurance agency, often referred to as an insurance broker or independent agent, actively solicits, compiles and terminates policies for a variety of insurance providers on behalf of a number of clients. However, they are not directly associated with any one insurance provider. An insurance agent works on a commission basis, receiving a percentage of the premium money that the insurance premium represents. The insurance agent will also receive a percentage of the death benefits paid out to beneficiaries and will receive a percentage of the surrender value paid out to the insured. Some agents receive a fixed sum of money upfront in order to act as an independent agent, while others work on retainer. Our website provides info about Kim Austin – State Farm Insurance Agent – Abilene insurance agency.
Insurance agencies can be licensed by states to sell insurance in specific areas or for a specific class of coverage. Some states may allow for a “compulsory sale” of insurance to an insurer. Under such circumstances, an insurance agency will market its products to potential customers, collect an insurance premium and then sell the policy to the customer at a public auction. Once an insurance policy has been sold to a purchaser, the agency resells the policy to the purchaser at a diligence premium. The proceeds of the earnest premium are retained by the insurance agency; however, they are only paid out if the policy is actively marketed and sold to customers. If no action has been taken, the surplus lines will accumulate and remain unsold until the policy expires or is purchased at a later date by a new customer.