People often don’t realize the difference between an insurance broker and an insurance agent. After all, they are both selling insurance. But knowing the difference could help you decide on who you should get advice from to suit your personal circumstances.
An insurance broker is independent of the insurance companies. Brokers will work with a variety of insurance companies, which they have researched and likely have dealt with for years. They develop distributor relationships and therefore they know which companies are good to work with and how they handle customer service and claims. It also means they can get you the most appropriate insurance coverages, options, prices and discounts for your particular situation. Essentially, a broker will do the legwork of shopping for your insurance. Brokers must pass exams and be licensed by the governing body in the province(s) in which they work. They can give you advice and guidance on your insurance needs. All of this comes at no cost to you. Brokers are paid a commission by the insurance companies they choose to represent whenever they sell that company’s policies.
On the other hand, an insurance agent represents just one insurance company. This means they know their products extremely well. However, they are only able to sell you products from the range offered by their specific insurance company. This limits your options in terms of coverage options and price. Agents are also required to be licensed by the governing body, though the knowledge they have is narrower than what a broker needs. In one respect, agents are the same as brokers in that they too are paid by the insurance company they represent.
Broker or agent, the choice is yours. Find out as much information as you can and decide what best suits your needs. At the end of the day, an agent represents an insurance company, but a broker represents you.