What is the difference between an insurance agent and an insurance broker?

An insurance agent represents the insurance company and sells its policies, while a broker represents the customer and shops coverage among companies. Captive agents work for one company, and independent agents sell for several; brokers represent clients rather than insurers and cannot bind coverage, which is done by an agent or the insurer. Most states license both under the single "producer" license, and the NAIC notes the term producer includes insurance agents and insurance brokers.

In Vermont the legal distinction has largely disappeared: the Producer license replaced the former agent and broker license types under Title 8, Section 4791. In common usage, an agent represents insurers, and a captive agent works exclusively for one company. A broker represents clients rather than insurers, while an independent agent sells for several companies.