Agent

Definition

An agent is a person or entity authorized to act on behalf of another (called the principal). In the insurance context, an agent is someone who represents an insurance company and has authority to sell policies, bind coverage, and sometimes settle claims. The distinction between an insurance agent and a broker is important: an agent typically works for and represents the insurance company, while a broker represents the policyholder and shops for coverage among multiple insurers.

How It’s Used in Personal Injury Cases

Insurance agents play significant roles in personal injury claims. They may have sold the at-fault party their liability policy, and any representations they made about coverage can bind the insurance company. If an agent fails to procure adequate coverage despite a client’s request, that agent—and potentially the insurance company—may be liable. Agents also sometimes handle initial claims reporting, and their actions in this capacity can affect how your claim is processed. Understanding whether someone is an agent or independent broker helps determine who may be held responsible for errors.

Practical Example

A policyholder asks their insurance agent for “the best available coverage” when purchasing auto insurance. The agent provides a policy with only the minimum required uninsured/underinsured motorist coverage of $30,000, without explaining that for just a few dollars more, the policyholder could have obtained $100,000 in coverage. When the policyholder is later seriously injured by an underinsured driver and their damages exceed $30,000, the agent’s failure to properly advise them may make both the agent and the insurance company liable for the difference in coverage they should have received.

Why It Matters to Your Case

The actions and representations of insurance agents can create legal obligations for insurance companies through the doctrine of respondeat superior—the legal principle that makes principals liable for their agents’ conduct within the scope of their authority. If an insurance agent makes misrepresentations about coverage, fails to properly explain policy options, or neglects to forward your claim to the insurer, the insurance company may be held liable for these failures. You can verify an insurance agent’s license and status through the Texas Department of Insurance agent lookup.

Key Takeaway

An agent is someone authorized to act on behalf of another party, and in insurance matters, agents represent insurance companies. Their actions and representations can legally bind the insurance company, which may become significant if errors affect your ability to recover compensation.