Do you need an insurance broker?

Insurance coverage is one of those things we all know we need--whether it be home, life, travel, pet, or auto insurance. That said, between confusing policy jargon, rising premiums, and endless provider options, buying insurance can feel overwhelming. That's where insurance brokers come in. But do you really need one? Or can you handle purchasing insurance on your own?

Let's face it: With auto insurance premiums on the rise by 9.6% year-over-year in both July and September of 2024, and severe weather events leading to $3.1 billion in insured losses in 2023, finding the right coverage for your lifestyle is more important than ever.

What is an insurance broker, really?

An insurance broker is a licensed professional who helps Canadians just like you find insurance products from a range of insurance providers. Unlike insurance agents, who work directly for one specific insurance company, insurance brokers work with multiple companies.

The main difference between insurance brokers and insurance agents is that insurance brokers act in your best interests, not the insurers. You can think of them like your own personal shopper. They're there to listen to your insurance needs, assess your risk profile, and provide personalized advice and different coverage options within your budget that balance cost and protection. As independent insurance brokers work with multiple insurers, they can offer more personalized services than agents.

Licensed professionals on your side

In Canada, insurance brokers must be licensed and are required to follow regulations set out by provincial insurance councils. Many are also affiliated with professional organizations like the Insurance Brokers Association of Canada (IBAC), which functions to promote ethical standards and ongoing education for professionals in the industry.

As insurance brokers operate independently, their unbiased support can be reassuring and help you make more informed decisions about your coverage, especially when purchasing imperative coverage like life or health insurance.

Benefits of buying insurance through an independent broker

Working with an insurance broker instead of directly with an insurance company offers more than just convenience. Here's a closer look at some benefits you can experience throughout the process:

• Personalized insurance advice: Every individual and business has unique insurance needs. An insurance broker takes the time to understand your specific requirements and searches for policies that provide the right coverage at the right price.

• Time savings: Shopping for insurance can be time-consuming and overwhelming, especially when faced with numerous options and complex policy terms. Insurance brokers handle the legwork on behalf of their clients. They gather quotes, negotiate terms, and manage policy renewals, saving clients valuable time and effort.

• Claims handling: Dealing with insurance claims can be a complicated and time-consuming process. Insurance brokers act as your advocate in the event of a claim. They guide you through the process, liaise with the insurance company on your behalf, and work to ensure a fair and timely settlement.

• Annual reviews & ongoing support: Insurance brokers provide ongoing support to their clients throughout the policy term. They assist with policy changes, address any concerns or inquiries, and provide guidance during policy renewals.

• Objective advice: Unlike insurance agents who work directly for specific insurance companies, brokers are independent professionals who represent the interests of the insurance buyer. They are not tied to any one insurer, which means they can offer objective recommendations and help clients find the best coverage from a wide range of options.

• Expert guidance: Insurance brokers bring industry expertise to the table. They stay updated with the latest industry trends, coverage options, and regulatory changes. With their knowledge and experience, brokers can offer personalized advice, ensuring you understand the intricacies of different policies and make informed decisions.

Hypothetical example of using an auto insurance broker

Angela from Calgary worked with an auto insurance broker to renew her car insurance. During the review, her broker helped her compare insurance quotes from multiple companies. By doing so, Angela was able to save $200 on her coverage, without having to compromise her protection.

When using insurance agents makes sense

Insurance brokers offer numerous benefits, but they aren't always necessary in every situation. For example, if you’re buying a simple insurance policy, like basic auto insurance for an older car or tenant insurance for a small rental apartment, you might find what you need by working directly with an insurance company.

Insurance providers often offer discounts for numerous reasons, like bundling your home and auto insurance, being a loyal customer, and more. If you're confident when shopping for new insurance policies, enjoy online comparison tools, and don't mind reading through policy documents yourself, working with an insurance agent directly with an insurance company can still help you save money.

Insurance Broker vs. Direct Insurance Provider: A Comparison

Still unsure which route to take? Here's a side-by-side comparison to help you better understand the differences between insurance brokers and insurance companies:

The choice between using an insurance broker or going directly with an insurance company depends on your specific needs, preferences, and the complexity of your insurance requirements. Both options have their advantages and considerations.

Choose an insurance broker if you value expert guidance, customized services, and access to multiple options. They save you time, provide tailored advice, and handle claims on your behalf. Or you can opt for going directly with an insurance company if you prefer a simplified process and direct relationships.

How to choose a good insurance brokerage

According to the Brokers Association of Canada, there are 38,000 brokers and counting across the country. Choosing the right insurance brokerage can make a world of difference when it comes to your overall experience. Here's how to ensure you're working with a reputable broker who has your best interests in mind:

Credentials of the independent insurance broker

• Ensure they’re licensed in your province.

• Look for connections with groups like the Insurance Brokers Association of Canada (IBAC) or other provincial associations.

Transparency

• Ask how they are paid. Do they charge a broker fee or receive a commission directly from the insurance company as they sell policies?

• Clarify how many insurance companies they represent. A wide selection means better options for you in terms of customization and savings.

Communication style

• A good broker will listen, ask questions, and explain policy differences clearly so you can make an informed choice about your coverage.

• Insurance brokers are trusted guides. They should be responsive and willing to teach you the things you don't know, not just sell insurance.

Reviews and referrals

• Check Google reviews, local directories in your community, or ask friends and family members for referrals.

• Look for brokers with experience in your type of insurance, whether it be car insurance, home insurance, business insurance, or other insurance options.

Red flags

• They push one insurer rather than a variety of companies.

• They avoid questions about fees, commissions, or won’t show quotes from specific companies.

• They pressure you into buying insurance policies quickly.

Contact BrokerLink to learn more

At BrokerLink, we've been helping everyday Canadians find affordable, customized insurance since 1991. With years of industry knowledge and access to some of Canada's top insurers, our brokers can help you shop around, compare insurance rates, unlock discounts, and answer any questions or concerns you may have along the way.

Whether you're looking for an insurance broker in Ontario, Alberta, or Atlantic Canada, know that our brokers live and work in your communities, allowing them to personalize your coverage without sacrificing your protection.

FAQs

Do you need to pay broker fees?

Not all brokers charge fees for their services. Most brokers are paid by the insurance companies with which they are affiliated through commissions. This means you won't pay anything directly. Regardless, you should still ask the broker up front whether broker fees apply. If they aren't willing to tell you, it may be better to look somewhere else.

Are brokers regulated in Canada?

Yes, all brokers must be licensed by their province. For example, in Ontario, they are required to follow ethical and legal standards outlined by the Registered Insurance Brokers of Ontario body. B.C. also has a regulatory body known as the Insurance Brokers Association of British Columbia. Each province has their own version of these regulations.

Do brokers only work with big insurers?

No. Brokers often partner with a mix of large and small insurance providers to ensure Canadians like you are able to find more specialized coverage for their needs.

Can a broker help with complex or high-risk scenarios?

Absolutely. Brokers are industry experts who can help you find coverage for your unique needs, regardless of whether you're looking for health insurance, starting a small business, moving to a new home, or going on an extended vacation. Their ability to assess your overall risk, structure policies based on your needs, and advocate for you during your insurance claims can be a game-changer.

Is it worth using a broker for home or auto insurance?

Whether it's worth it to use an insurance broker depends on your situation. For example, if you've recently renovated your home, have numerous claims on your insurance history, or are in an area with rising climate risks (like flooding or wildfire), a broker can ensure you’re not underinsured, which is something a single insurer may not be able to do.

Can I use a broker to bundle my home and auto insurance?

Yes, many brokers specialize in bundling multiple policies from the same or different providers to get you discounts. While direct insurers also offer bundling, brokers can often create more flexible packages that still provide savings and help you find discounts with other providers as well to maximize your savings overall.

If you have any questions, contact one of our local branches.