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HomeHome & FamilyWhat Is the Difference Between An Insurance Broker and An Insurance Agent?

What Is the Difference Between An Insurance Broker and An Insurance Agent?

Insurance agents and brokers are both licensed insurance professionals who help individuals protect their homes, vehicles, and businesses.

However, the way in which they connect clients with insurance policies is vastly different.

If you're looking to get a new insurance policy, but aren't sure who to talk to, here are the major differences between an insurance broker and an insurance agent:

What is an Insurance Agent?

Insurance agents are professionals who sell an insurance company's products to consumers and earn a commission. They help individuals choose the right insurance policies but represent the insurance company during the transaction.

There are two types of insurance agents: Captive agents who represent one insurer and independent insurance agents who represent more than one insurer.

Overall, insurance agents have a contractual obligation to a specific insurance company so their loyalties lie first with that company.

However, they tend to have extremely good knowledge of the products and policies offered by their company and can sell you insurance based on their close ties.

But, in the end, they are still bound to a single group of policies that may not be appropriate for your unique situation. 

Working With an Insurance Agent

When you work with an insurance agent, you are cutting out the middleman and dealing directly with the insurance company - this saves you time with it comes to policy comparisons and getting a quote.

However, you may not get the best price because the agent works for the company, not for you, and you won't get much advice on saving money.

Because of this, you may find that insurance agents tend to side with their company when it comes to paying out claims.

What is an Insurance Broker?

On the other hand, insurance brokers are a sort of "free agent" who do not carry contractual obligations to any one particular provider - this is what makes them different from independent agents.

They can reach out to any number of insurers to find the best fit and cheapest policy to suit their clients' needs.

Just because they have access to multiple companies in the insurance industry doesn't mean that obtaining a policy is show. They can usually provide you with insurance coverage and documentation within 24 hours.

When you deal with an insurance broker, you have a third party contact in the event that you have to make a claim as well as a larger pool of insurance options should your needs change.

Insurance brokers can also guarantee that you get the best price and coverage available - even if it means switching insurers.

Working With an Insurance Broker

Insurance brokers work for you and are connected to various companies in the insurance business.

They have widepread knowledge when it comes to the current market and can find a policy that best suits your budget and individual needs.

Insurance brokers do earn commission rates but the commission is paid by the insurance company.

This means that, if you need to file a claim, an insurance broker will push to ensure that your receive proper compensation - they are not interested in saving the company money.

Insurance Brokers & Agencies: Which One Should I Choose?

If insurance brokers seem to be the way to go, why do people still utilize the services of insurance agents? 

There are benefits to dealing with independent agents. You can keep all of your policies within one company, making them easier to keep track of. Also, you can call various insurance agents to get quotes from their respective companies - so there is a way to save money there.

However, if you're new to the insurance game, or want to save time when it comes to saving money, an insurance broker can compare multiple policies across multiple insurance companies to find you the cheapest price and most appropriate policy.

Overall, it doesn't hurt to ask questions. If you are interested in exploring your options by speaking with both an insurance agent and an insurance broker, here are some questions you should ask:

  • Are you familiar with my industry? This is particular important if you are seeking business insurance. You want to make sure the insurer understands your needs.
  • What types of insurance do you sell? There is a wide variety of insurance products out there, so make sure they offer the one you need.
  • What are your credentials? Both insurance brokers and insurance agents are required to acquire licensing and certification. Make sure they have attained the proper insurance credientials.
  • Who do you represent? Find out what insurance companies the agent or broker deals with and represents. You can then research reviews and feedback about those companies.

Whether you go with a broker or agent, you want to make sure they can meet your insurance needs. Explain what types of services and coverages you are looking for and see if the insurer can provide them.

Meeting Your Insurance Needs

Many local brokerages like BKIFG Barrie Business, Car & Home Insurance Brokers are dedicated to providing you with the right coverage at the right price to meet your unique insurance needs.

Local companies understand the insurance business and will use their knowledge to assist you - whether you are looking for insurance for individuals or insurance for your business.

Get in touch with one today to discuss your insurance needs!

Syandita Malakar
Syandita Malakar
Hi guys this is Syandita. I started Business Module Hub to help you all to post updated articles on technologies, gadgets. Although I love to write about travel, food, fashion and so on. I quite love reading the articles of Business Module Hub it always update me about the new technologies and the inventions. Hope you will find Business Module Hub interesting in various way and help you accordingly. Keep blogging and stay connected....!
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