The terms “insurance agent” and "insurance broker" are often used interchangeably with “broker” and “insurance agent” in the insurance world. But the truth of the matter is that there is a huge difference between these two types of professionals. So, what do they mean?
However, in this article, we'll discuss what each type does, how they differ, and why it matters when choosing one over the other.
What Is An Agent And A Broker?
An agent is someone who sells insurance products for a specific insurer or group of insurers. They work directly for the insurance company and represent them on a contractual basis. Agents can be independent contractors or employees of the company. In other words, an insurance agent is licensed by the province to sell policies for one specific insurance company.
A broker on the other hand works independently of any particular insurance company. He/she acts as a middleman between customers and insurance companies. This means he/she gets paid based on commissions earned from selling insurance policies.
Insurance brokers are also called insurance intermediaries because they act as a go-between for clients and insurance providers. With their comprehensive knowledge of the current insurance market, they can find the types of insurance policies that best suit your individual needs.
Unlike agents, insurance brokers generally have a higher degree of knowledge regarding many different company offerings than agents. Because of this, they can modify your existing policy with any insurer. As such, you don't have to worry about finding a new provider if your old one goes out of business.
But like insurance agents, they are also licensed and regulated by provincial governments. This means you can rest assured knowing that the services you receive meet a certain standard.
Why should I choose a broker over an agent?
There are several reasons why you might want to consider using a broker instead of an agent. Here are some of the most common ones:
1) You're not sure which company you'd prefer to use. If you're unsure about which company would provide the best insurance coverage, then you may want to look at the options available through a broker.
2) Your insurance needs to change frequently. Sometimes, you decide to switch carriers after your first policy expires. However, if you've already chosen an agent, you won't be able to easily switch without paying a hefty penalty fee.
3) You want to compare insurance quotes from various insurance companies. While agents can help you find the best deal, they cannot offer you more than one quote at a time. On the other hand, brokers can give you a variety of quotes at once.
Things to consider when searching for an insurance broker
When looking for an insurance broker, here are some things to keep in mind:
1) Know Your Needs
Before you start shopping around for insurance, make sure you understand exactly what you're buying. You want to get a clear idea of your coverage requirements, whether you're looking for liability insurance, property insurance, auto insurance, etc.
2) Find The Right Provider
Once you've got a handle on what you need, it's time to look for a broker. There are several ways to search for one, including online directories, referrals, word of mouth, and even personal recommendations.
3) Ask For References
Once you've found a few potential brokers, ask them for references. If they won't give you names, ask for contact information for at least three people. Call those contacts and ask them for feedback.
4) Get Quotes
Now that you've narrowed down your choices, it's time to get quotes. Make sure you compare apples to apples. Don't just compare prices; make sure you're comparing similar coverages.
5) Decide Who To Use
After all this research, you should have a good idea of which broker would be best for you. However, before making a final decision, talk to each broker individually. Ask questions and see how they respond. Then decide which broker has the personality and approach that fits best with yours.
6) Stay Organized
If you're going to shop around for insurance, you'll probably end up doing a lot of talking. That's why it's important to stay organized. Keep track of the dates and times of your conversations with each broker. Also, write down everything you learn during these meetings. It might seem tedious now, but you'll thank yourself later.
Q. What are the key differences between a broker and an agent?
Ans. Brokers and agents both sell insurance. Agents represent insurers, while brokers represent consumers.
Q. Is Carla Fabien an agent or a broker?
Ans. Carla Fabien is a professional wealth and insurance broker with over 20 years of experience in the industry.
The bottom line
While there is no hard and fast rule saying which type of agent or broker you should use, it's always best to choose an insurance expert who knows what he/she is doing. And since insurance brokers often have more experience in the industry than agents do, they may be able to help you save money while still providing you with a quality type of coverage.