The Differences Between Insurance Brokers and Insurance Agents
If you didn’t know already, insurance brokers and insurance agents are not the same thing. There are quite a few differences between the two. In this blog post, we will examine the main differences between an insurance broker and an insurance agent.
1. Employer: Insurance Brokerage
Insurance brokers are employed by insurance brokerages, and they are responsible for working independently and growing their own businesses and client lists.
2. Insurance Brokers Represent You
– Brokers have their clients’ best interests in mind, as that is who their licensing body dictates that must represent – the consumer
– Insurance brokers depend on satisfying their clients’ insurance needs for the success of their business. As a result, insurance brokers will work to get the best possible quotes and coverages for their clients.
3. Insurance Brokerages Earn a Commission
– Insurance brokerages are required to inform you that they receive a commission ranging betweeen 12.5% to 20% of the premium, directly from the insurance companies. The commission is NOT an addition to your premium or price of insurance.
– Insurance brokerages must notify you if they have any financial interest in any specific insurance company which can impact their offers to you.
4. Insurance Company Partners
One of the best benefits of getting insurance from an insurance broker is that they can shop around within the industry to find you the best insurance solution, both in terms of coverages available in the market & in terms of your cost of insurance. Insurance brokerages partner with multiple insurance companies, which means that brokers can get quotes and offer policies from all of their partnered insurance companies.
1. Employer: Insurance Company
Insurance agents are employed by insurance companies. For example, Desjardins, Co-Operators, or Bel-Air Direct, etc. all have their own insurance agents working for them. Insurance agents typically receive clients based on the people who call the insurance company directly.
2. You Are Usually Just a Number
Insurance agents earn an annual salary paid by the insurance company that they work for, and they answer incoming calls as they flow in. Don’t be surprised if they ask for your policy number and a review of your insurance situation every time you call!
3. Exclusive: Only Sell Policies From One Insurance Company
Insurance agents can only offer policies to clients from the insurance company that they are employed by. This means that if you need a new car insurance policy along with your home insurance policy, some insurance agents may not be able to help you get a new policy or their prices may not be very competitive. This is because the insurance company that they work for do not offer auto insurance quotes or does not have competitive auto insurance prices. Also, insurance agents may only keep their interests and the interests of the insurance company in mind, since their job is to sell insurance policies only offered by their employer.
4. Inadvertent Claims
You may find yourself accidentally opening a claim when you contact a direct writer insurance company! If you ask certain questions about potential claims, the call centre associate may open a claim number, not recognizing the serious negative impact it may have on your insurance record! by their employer.
We recommend getting your insurance from an insurance broker instead of an insurance agent because of all the benefits that an insurance broker can provide you with. It’s clear that insurance brokers are the best option for you and your insurance needs. If you need an insurance quote or want us to review your policies, you can always give us a call at 905-886-7277.