Insurance Agency vs. Insurance Carrier
June 7, 2022 4 minute read

The insurance world is full of jargon. There are many terms, phrases and abbreviations that can be confusing if you're not an insurance professional. The aim of this series is to clarify and explain common insurance concepts to empower you, our client, to understand the full depth of your insurance coverage and purchasing options.

One of the most fundamental but overlooked concepts in the insurance industry is the difference between an independent insurance agency like Chalmers Insurance Group, and an insurance company (or carrier) like Geico or Statefarm.

In this article, “insurance company” and “insurance carrier” mean the same thing and will be used interchangeably.

When people talk about buying insurance, whether it’s homeowners insurance, renters insurance, or car insurance, it tends to be the insurance companies like Geico or Statefarm that get the most attention. This is understandable given the amount of money they have to spend on advertising campaigns.

So, let's start with the basics. There are essentially two ways to purchase an insurance policy:

1. You can buy insurance directly from an insurance company who underwrites and originates the policy.

What does it mean to “underwrite” a policy? Underwriting is an evaluation of the risk that exists when insuring people or assets. An “underwriter” works on behalf of the company that is considering taking on the risk by providing a policy. Using the client’s individual risk factors, the company will calculate how much premium to charge for the policy term. There are too many risk factors to list here, but a few examples are age, marital status, credit history, driving history, location, etc.

The insurance company can only provide their own policy offers. Meaning, if there is a policy from a different carrier that provides more or better coverage for comparable or sometimes even less premium, you, the client, would never know. 

2. You can buy an insurance policy through an independent insurance agent.

The agent functions as your insurance placement specialist by gathering the same risk factoring data. Instead of pricing the risk, they use these factors to select from a range of insurance carriers who can offer a policy that best matches your specific needs. Clients are able to choose a policy or portfolio combination from multiple carriers rather than being limited to the one option offered by the single carrier.

It also allows the client to change their insurance company without having to start all over again. They keep the relationship built over time with their agent who can facilitate that switch for them. This is why using an independent insurance agent can be extremely beneficial. You are partnering with the agent using their expertise and the multiple policy options they can provide to make informed, affordable insurance choices.

It might help to think of the agency/company difference like this: the insurance carrier is the manufacturer. The insurance agency is the retail store. Even more simply put, an insurance carrier creates the product. An insurance agency sells it.

An independent insurance agency, like Chalmers, provides:

An insurance company provides:

We expect understanding these concepts to take time and it may even require additional explanation before you are comfortable with the terms or their meanings— and that’s okay!

Please don't hesitate to reach out to your Account Manager or a Sales Associate to learn more. That's what we're here for!

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"Chalmers Insurance is staffed with local people. These are people I see at the grocery store and know by name. I place complete trust in these neighbors to look out for my best interests with Chalmers insurance products or services."
- Tim P.
"The customer service Chalmers provides is outstanding. Imagine calling an insurance agency and feeling better than before you called. I'll never switch."
- Melissa E.
"Your agency takes good care of us with your dedication, love, and care."
- Customer since 2007
"Chalmers Insurance has always had our backs. They are respectful and so pleasant to work with. We are so thankful for having them in our lives!"
- Angelo C.
"Chalmers is always so helpful and always accommodates our requests with professionalism and humor! "
- Robert H.
"The Chalmers Group was super friendly, energetic and somehow made me feel happy about purchasing insurance, something I thought I would never say in my life. They were kind, honest, and more than you could wish for while shopping for something as mundane as insurance. Six out of five stars. "
- Jordan P.
"Chalmers was excellent throughout the process. They improved our coverage and ultimately reduced our premium. My agent communicated where there were differences and prepared a nice comparison of coverage. I was happy to place our coverage with Chalmers. "
- Susan A.
"Chalmers was quick to help me with a problem; my agent was knowledgeable and super supportive. I appreciate the professionalism and sense of humor. Overall, it was a wonderful experience. "
- Jan H.
"Chalmers walked me through everything in detail. They were fast to respond, friendly and knowledgeable."
- Sean G.
"My Chalmers agent was very helpful, knowledgeable, and patient with the process. To sum it up, the only thing better than my Chalmers agent would be two of her. "
- Richard S.
"Chalmers made it super simple and I had coverage before my lunch break was over. I was very satisfied. "
- Geoffrey P.
"My Chalmers agent answered all of my questions, explained insurance jargon to me, and was polite and knowledgeable. "
- Jennifer T.
"I appreciate how friendly the Chalmers Group is when I talk to them. They always have a positive attitude. "
- Amanda H.
"Always available and always kind. Chalmers works to find solutions."
- Elaine C.
"I appreciate being able to talk to an actual person who is both knowledgeable and helpful."
- Duke M.
"Helpful, knowledgeable staff that truly cares and takes the time to make a personal connection!"
- Aaron C.
"My interactions with Chalmers have always been flawless: quick, informative, highly professional. Having my home insured with Chalmers makes me feel good!"
- Client since 2016