An insurance agent also known as an insurance sales agent is a person who acts on behalf of the insurance company and has a principal-agent relationship to sell insurance coverage. He is a representative of the insurance company which has authorized him to enter into contracts with clients. In his duties, the agent should carry out his work with care and diligence. The agent represents the insurance company by selling policies to clients to cover them and their property against losses. They sell different types of insurance which include and are not limited to-:
- Property insurance covering theft, fire and damages
- Auto insurance covering theft and damages
- Home insurance
- Mortgage insurance
- Life insurance
- Liability insurance
- Health Care insurance
- Disability insurance
- Workers’ Compensation for workplace injuries
Insurance agents can be employees of an insurance company who sell policies of their employer only and earn a salary for so doing. They can also be independent insurance agents who sell insurance for various insurance companies and are paid commission. They also sell financial and investment products which include mutual funds, securities and retirement annuities etc. They may act as financial advisors and must obtain a license in the state of their operations. The different states have their own licensing requirements and insurance agents have to meet these requirements and pass specific exams.
The clients buy insurance coverage depending on their need i.e. a person who owns a car will buy auto insurance. People who live in areas prone to floods will buy flood insurance. People buy the insurance cover of the threat of loss they are vulnerable to or which they deem necessary. The agent discusses these needs with the clients and advises them which insurance coverage is appropriate for their need. The clients whether they are individuals or businesses will buy one or several insurance coverage.
The insurance agent will need analytical, planning, mathematical and interpersonal skills. They need to be good salesmen who have to be able to sell different types of insurance to different clients. They handle all the paperwork on behalf of the insurance company. Most insurance companies hire agents who have studied insurance, business, finance, marketing, economics, accounting and related fields. They need to understand the insurance laws and the changes in the insurance market from time to time. They have to be able to use the computer software used by that insurance company.
Agents are supposed to ensure that the policyholders pay the premiums regularly. They call them to send reminders and follow up the payments. They offer updated coverage depending on which risks the policyholder becomes exposed to from time to time. When a loss arises the insured is supposed to call the agent and inform him about the loss i.e. car accident, fire, theft etc. He should explain what happened and everything should be recorded. The claim is then filled and sent to the agent who will confirm the details depending on what was reported.