When you call us about your insurance policy, do you wonder who's actually answering? Many Central New York residents contact our agency with questions about claims, billing, or coverage changes, but aren't entirely clear about who we are—and who we aren't.
The confusion between insurance agencies and insurance carriers represents one of the most common misunderstandings we encounter. At the Horan insurance agency, we work with clients daily who assume we're the company that sets rates and pays claims.
In this article, we'll clarify the different roles insurance agencies and carriers play, how this distinction affects your insurance experience, and the value an independent agency can offer for your coverage considerations.
The Essential Difference Between Your Insurance Agency and Insurance Carrier
Your insurance relationship typically involves two separate entities: the insurance agency (like Horan) and the insurance carrier (like Erie, Progressive, or Travelers).
Insurance carriers are the large companies that:
- Design and develop insurance policies
- Set premium rates based on their risk calculations
- Underwrite policies and determine eligibility
- Process and pay claims
- Handle billing and policy administration
As an independent insurance agency, we:
- Represent multiple insurance carriers, not just one
- Work with you through consultation to identify coverage and policy options
- Present coverage options across different carriers
- Can show rate and coverage differences among carriers
- Assist with the application process
- Provide support during claims and billing questions
- Offer information when your situation changes
The key distinction: carriers create the products and assume the financial risk, while agencies connect you with these products and provide ongoing service. This relationship is similar to a retail store that sells products manufactured by various companies but doesn't make the products themselves.
You might wonder, then, how many or which carriers an independent agency can actually represent. While we work with multiple carriers, there's a specific system that governs these relationships.
To learn more about how independent agents access options from different companies, read our article: Can Independent Insurance Agents Sell Policies from Any Insurance Company?
Why This Distinction Matters for Your Insurance Experience
Understanding the difference between agencies and carriers helps set realistic expectations and can improve your insurance experience in several ways:
- Rate Questions: When you ask about a premium increase, we can explain the carrier's reasoning and show alternatives. However, agencies don't establish the rates—carriers do based on complex underwriting factors. This often leads to questions about whether bypassing an agent and going directly to a carrier might result in lower rates. For a clear explanation of how insurance pricing works and why going direct doesn't typically provide better rates, read our article: Will You Get Better Insurance Rates By Going Direct to Carriers Instead of Using an Agent?
- Claims Decisions: During claims, we can help explain the process and communicate with the carrier, but the carrier makes coverage determinations based on policy language.
- Coverage Options: As an independent agency, we work with multiple carriers, giving you access to more options than dealing directly with a single carrier.
When clients understand these distinct roles, conversations about insurance changes become clearer and more productive.
For example, if you're concerned about a rate increase, knowing the agency doesn't set the rates helps redirect the conversation toward solutions—like quoting with different carriers—rather than frustration about the increase itself.
The Advantage of Working with an Independent Agency vs. Direct Writers
Some insurance companies operate as "direct writers," where you work directly with the insurance carrier with no separate agency involved. Examples include companies that advertise direct phone numbers or websites where you can purchase policies without an agent.
Working with an independent agency can provide several advantages:
- Access to multiple carriers through a single point of contact
- Someone to show options across different companies
- Information from someone who understands the local market
- Options to consider when your rates increase with your current carrier
- Consistent service even if you change carriers
The experience differs when working with a direct writer, as you're limited to that company's specific products and pricing structure.
Beyond understanding the fundamental difference between an agency and a carrier, it's also helpful to explore the various paths you can take to secure coverage.
For a comprehensive look at the differences between independent agents, captive agents, direct writers, and brokers, consider exploring our detailed comparison: Comparing Insurance Paths: Captive Agent, Direct Writer, Independent Agent, or Broker?
How to Work with Your Agency and Carrier
Understanding the agency-carrier distinction can help you navigate the insurance process. Here are some considerations:
For Claims Questions: If you have a claim, you can report it to either your agency or directly to your carrier. Your agency can help explain the process even when the carrier handles the actual claim.
For Billing Concerns: Your agency can help explain billing questions, though payments typically go directly to the carrier.
For Policy Changes: Communicating changes to your agency allows us to work with the carrier to implement them. This creates a record of your requests and gives you a contact if questions arise.
For Rate Increases: Ask your agency to explain increases and explore alternatives across multiple carriers if needed.
Working Together for Coverage Solutions
The insurance world can seem complex, but understanding the basic relationship between agencies and carriers helps simplify your experience. Your independent agency serves as your resource, while carriers provide the actual insurance coverage.
At the Horan insurance agency, we value clear communication about these roles to build stronger relationships with our Central New York clients. When you understand who does what, you can approach decisions about your coverage with more clarity and know who to contact with specific questions.
Click the Get a Quote button below to experience how working with an independent agency gives you access to multiple carriers through a single, local point of contact.
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