---
title: "Insurance Agent vs. Broker: The Difference — Lapidar"
url: https://getlapidar.com/glossary/insurance-agent-vs-broker/
description: "An agent acts for carriers; a broker is described as acting for the customer. Who pays the commission, how fees differ, and what to reconcile. Example."
last_modified: "Tue, 13 Oct 2026 00:30:00 GMT"
source: getlapidar.com (HTML converted to Markdown at the edge)
---

Glossary · Insurance agency commissions

# Insurance agent vs. broker

An insurance agent sells and services policies on behalf of one or more carriers; a broker is described as acting for the customer. In practice both are usually paid commission by the carrier that writes the policy, and many states license both under a single producer license, so the label matters less on a commission statement than the contract does.

By Lapidar, the team building it · October 13, 2026 · Also called agent vs broker; insurance producer; broker vs agent

## What it means

The NAIC’s [glossary of insurance terms](https://content.naic.org/glossary-insurance-terms) defines an agent as “an individual who sells, services, or negotiates insurance policies either on behalf of a company or independently,” and a broker as someone who works “on behalf of the customer” and is “not restricted to selling policies for a specific company, but commissions are paid by the company with which the sale was made.”

How it works: an agent’s authority comes from a carrier appointment or agency agreement, which can include the power to bind. A broker shops the market for the client and submits to carriers or wholesalers. Many states now issue a single producer license, and how the terms are used varies by state and by line.

## How it shows on a commission statement

Either way, commission arrives from the carrier, or from a wholesaler or MGA when the placement went through one. Some brokers also charge the client a fee; that fee is separate and does not appear on the carrier’s statement. Reconcile carrier commission against the policies you placed, and track client fees in your own records.

## Example

Same policy, two routes · EX-49207Example data

**Premium**
$8,000.00

**Agent route: carrier commission at 12%**
$960.00

**Broker route via wholesaler: carrier commission at 15%**
$1,200.00

**Wholesaler’s share**
−$400.00

**Broker’s commission from wholesaler**
$800.00

Example data. Rates and splits are invented; any separately disclosed client fee would sit outside the carrier statement. Routes are illustrative, not a comparison of typical earnings.

## Commonly confused

- **Captive vs. independent** is about how many carriers an agent represents; agent vs. broker is about whom the intermediary acts for. See [captive vs. independent agent](https://getlapidar.com/glossary/captive-vs-independent-agent/).
- The **agent of record** is whoever the carrier pays on a policy, whatever the title. See [agent of record](https://getlapidar.com/glossary/agent-of-record/).
- A **managing general agent** acts for the carrier with delegated authority. See [managing general agent](https://getlapidar.com/glossary/managing-general-agent/).

## Common mistakes to check

- Assuming a broker is paid by the client, so there is no carrier commission to reconcile.
- Mixing client fees into carrier commission totals.
- Expecting the gross carrier rate on a placement that went through a wholesaler.

## Questions

### Is an insurance broker paid by the client or the carrier?

Usually by the carrier, through commission, as the NAIC glossary notes. Some brokers also charge a disclosed fee to the client, which is separate from commission.

### Are agents and brokers licensed differently?

It depends on the state. Many states use a single producer license for both, while some, such as New York, still license agents and brokers separately. Check your state insurance department.

## Sources

- National Association of Insurance Commissioners, [Glossary of Insurance Terms](https://content.naic.org/glossary-insurance-terms), entries for agent and broker. Retrieved October 13, 2026.

Lapidar is [commission reconciliation software for independent insurance agencies](https://getlapidar.com/), in its founding pilot. Related: [commission calculator](https://getlapidar.com/tools/commission-calculator/).

In this entry

1. [What it means](https://getlapidar.com/glossary/insurance-agent-vs-broker/#meaning)
2. [On a commission statement](https://getlapidar.com/glossary/insurance-agent-vs-broker/#on-statement)
3. [Example](https://getlapidar.com/glossary/insurance-agent-vs-broker/#example)
4. [Commonly confused](https://getlapidar.com/glossary/insurance-agent-vs-broker/#confused)
5. [Common mistakes](https://getlapidar.com/glossary/insurance-agent-vs-broker/#mistakes)
6. [Questions](https://getlapidar.com/glossary/insurance-agent-vs-broker/#faq)
7. [Sources](https://getlapidar.com/glossary/insurance-agent-vs-broker/#sources)

All 51 terms, from account current to written premium.

[Glossary A–Z](https://getlapidar.com/glossary/)

Check commission on every placement, direct or through a wholesaler.

[See a sample report](https://getlapidar.com/sample-report/)

## Reconciling statements is the hard part.

Check commission on every placement, direct or through a wholesaler. [See a sample report](https://getlapidar.com/sample-report/), or read [how the founding pilot works](https://getlapidar.com/pilot/).

[Open an account — founding pilot](https://app.getlapidar.com/signup)

[See a sample report](https://getlapidar.com/sample-report/)