Many people don’t realize there’s a difference between an insurance broker, an insurance agent and an insurance company. In fact, while they have similarities, they are very different. When you’re in the market for insurance, knowing who to turn to for advice is an important step in the journey. If you’re unsure about the difference between a broker and an agent, check out the details here before you choose the one that best suits your needs.
The broker difference
An insurance broker represents a number of different insurance companies. That’s good news for you, because it means a broker has access to a wide range of products, coverage options, and prices — so they’re not only able to find the best insurance for your situation, but they’ll also shop around and compare your options to get you the best bang for your buck. A broker can also find out what business insurance rates and home insurance discounts are available from different insurance companies and help you find out if you qualify.
In terms of education and training, a broker has to pass rigorous licensing exams and register with an official provincial body. A broker must also become a member of an insurance brokers association (the governing body that oversees brokers in each province). A licensed insurance broker can provide guidance and advice on all of your insurance needs. And best of all, they won’t charge you any fees for their services or expertise — a broker is paid by the companies they partner with.
Brokers may be independent or may be owned by an insurance company. Acera Insurance is an independent insurance broker, meaning we can offer completely honest insurance advice and also work with a large number of insurance partners. This allows us to get truly competitive quotes and compare coverage to get you the best possible insurance for the price.
The agent experience
The major difference between a broker and an agent is that an agent only represents one insurance company. This has both advantages and drawbacks for you as a customer. An insurance company handles the actual policy and insurance. They enter into a contract with the client which essentially promises compensation in the case of damage or loss (if it is covered as per the policy terms). They set the rates, determine coverage, and deal with claims.
Undoubtedly, an agent will know their own products very well, so they can usually explain the nuances of any policy in detail. On the other hand, an agent doesn’t have as wide a range of products to draw from as a broker does, which limits your coverage options and price points. And while an agent does have to get a licence from a separate provincial body, they aren’t required to complete as many courses as brokers.
As far as payment goes, an agent won’t charge you a fee to recommend a policy to meet your needs, either; their expertise is also paid for by the company they represent.
Common questions on the differences between brokers and insurance companies
Your broker works with you to continually ensure that you have the best policy for your needs while keeping an eye on price. They keep you up to date and informed around your policy and risk management. They’re there to answer your questions, make changes to your policy, help with payments and support you through the claims process.
Your insurance company will send you policy documents and official notifications of any changes to your coverage. They determine your insurance premiums and may accept payment directly. Their staff is also who you will deal with in the event of a claim (in most cases).
An insurance broker can provide you with independent insurance advice. They can also take care of the price shopping and coverage comparisons when you’re purchasing insurance or looking to change insurance companies. They’re also there to support you through anything insurance related. Learn more about all the advantages of working with an insurance broker.
The choice is yours
Whether you choose to talk with a broker or an agent about buying car or home insurance, keep in mind that the choice is yours and you’re free to gather as many quotes as you want. And since you’ll be insuring some pretty valuable assets, learning as much as possible before you decide is always your best bet.
If you have a new home or vehicle to insure — or if you’re thinking about shopping around before renewing your current policy — a licensed insurance broker can help. A good broker will ensure you make the most of your insurance coverage. They’ll find you the coverage that meets your needs for the best possible price and continue to provide service and support. Connect with a local Acera Insurance broker to assist you.