Anytime you purchase insurance, you have the option of buying it through an insurance broker or an insurance agent. Both will result in you purchasing a policy but there are a few key differences in the ways they operate and can help you. Keep reading for more information on both options to determine whether going through a broker or an agent is right for you.
What is an insurance agent?
An insurance agent is a licensed individual that sells insurance policies on behalf of a specific insurance company. Insurance agents are provincially licensed and highly knowledgeable about the specific insurance products offered by their insurance company. Insurance agents are salaried employees who are trained to sell a provider’s full list of product offerings. So if a customer has questions about a specific policy sold by a certain company, an agent will be able to help them. Beyond explaining the terms of the insurance policies they sell, an insurance agent might also be able to provide customers with special discounts. For example, if you agree to bundle policies (i.e. if you purchase an auto insurance policy and a home insurance policy from the same company), they may offer you a discount.
The pros and cons of insurance agents
One pro of purchasing insurance through an insurance agent is that you cut out the middleman. Since you will be purchasing the policy directly through the provider, you won’t have to spend time comparing policy options. Instead, you can buy your policy quickly and easily. In fact, purchasing insurance can often be done online or over the phone.
The downside of purchasing insurance through an agent is that you may not be getting the best price. As their interests lie with the insurance company, they likely won’t offer much advice on how you can save money.
Ultimately, if you choose to go the insurance agent route, do some research to ensure you are buying a quality insurance policy. We also recommend interviewing the agent, asking them about the coverage options available, if and how an existing policy can be modified, what the claims process is like, and whether they offer discounts for certain group affiliations or union memberships.
Questions to ask an insurance agent
Finding out as much information as possible before buying an insurance policy is crucial - especially when buying one through an agent. The experts at BrokerLink recommend that all customers ask the following questions (either over the phone or in person) before buying insurance from an agent:
- What is the claims process (e.g. is it done online or over the phone?) and how long does the claims process take?
- If I have questions or need to file a claim, will I be dealing with the same agent each time or will any available agent be taking my request?
- What are the most common claims your insurance company handles?
- What can I do to avoid my claim being denied?
- What are your coverage options?
- In your professional opinion, am I overinsured or underinsured? For example, do I need comprehensive coverage or collision insurance if I have an old car?
What is an insurance broker?
An insurance broker works independently of any specific insurance company. In other words, they work for you, the customer. Insurance brokers typically work at brokerages, such as BrokerLink, and possess extensive knowledge of the insurance industry and the current market. Unlike insurance agents that specialize in their company’s specific offerings, insurance brokers have a high degree of knowledge about multiple companies’ offerings. They also have relationships and connections with many of the top insurance providers in the area, which allows them to find policies that suit their customers’ needs.
Like agents, insurance brokers are also licensed and subject to strict regulations, so customers can feel safe and secure when they purchase insurance through a broker or an agent. However, unlike insurance agents, insurance brokers work on commission. This commission is paid by the insurance company the customer ends up purchasing a policy from.
Insurance brokers cannot bind coverage (i.e. complete the final step of the contract), so this final step is conducted by the insurance company. However, the insurance broker is the one who connects the customer with the product sold by the insurance company. While they cannot complete this last step, insurance brokers can help modify your policy with the insurer and can even help you file a claim. Brokers often fight to ensure their customers receive proper compensation in the event of a claim.
The pros and cons of insurance brokers
The main pro of working with an insurance broker is that they solely represent the customer, which makes them an attractive option. The primary mission of brokers is to meet customers and match them with the best possible coverage. To do this, they must have extensive knowledge of the insurance products available, which they obtain by researching the terms and conditions for a wide range of policies. Beyond their knowledge, insurance brokers can shop around to ensure you’re getting the best coverage at the lowest rate and provide tips on how to save money on insurance. Speaking of money, brokers have the ability to cater to all kinds of budgets. By shopping around and obtaining quotes from several providers, they can find a policy that meets your lifestyle and budget. Further, purchasing insurance through a broker means less work for you. You can simply tell the broker what you’re looking for, and they’ll do all the necessary research on your behalf. Plus, buying insurance from a broker is easy and nowadays can be done entirely online or over the phone.
The cons of working with an insurance broker are that they may not have as much as knowledge of specific products as an insurance agent, and they could be sales-driven since their salaries are commission-based.
Questions to ask an insurance broker
When speaking with an insurance broker, be sure to ask the following questions:
- How long have you worked in the insurance industry?
- Will I deal with the same broker each time or another team member?
- How can I contact the broker if necessary (e.g. phone, email, or online)?
- What endorsements or optional coverages are worth adding to my policy?
- How many insurance providers do you have relationships with?
- Am I paying the best price for auto insurance? What advice can you offer that would allow me to save money on car insurance?
How to buy insurance through an insurance broker
If you think buying insurance through an insurance broker is right for you, follow the steps below to get started:
1. Contact an insurance broker
The first step to finding the best coverage at the lowest rate is by contacting an insurance broker. BrokerLink is available to take your calls, answer your emails, or chat in person at any one of our locations across Canada. At BrokerLink, an expert insurance advisor can answer your questions, provide you with a free quote, and get to know your insurance needs.
2. Let us shop around on your behalf
The second step of buying insurance through a broker is the easy part - sit back and relax. That’s right, when you work with a broker, they do all the work for you and you can spend your free time how you want to be spending it. Meanwhile, your dedicated BrokerLink insurance advisor will be contacting Canada’s top insurance companies to obtain and compare quotes to find you the best rate.
3. You get a great rate
The final step to purchasing insurance through a broker is getting a great rate. Since BrokerLink insurance brokers are licensed insurance experts, they know where to look for the best insurance deals. Your advisor will give you several options to choose from, walk you through each, and then it’s up to you to pick your favourite.
Insurance broker vs. agent: Determining which is right for you
When searching for a new home or auto insurance policy, you have plenty of options to consider. One of the first decisions to make is whether you want to enlist the help of a broker or purchase insurance directly through an agent. The key difference to remember between insurance brokers and insurance agents is that the former represents the customer while the latter represents the company they work for. This distinction can make a big difference. While many people prefer the idea of working with someone that prioritizes their needs over a company’s, there are certain circumstances in which someone might want to purchase insurance through an agent. For example, if someone has been with the same insurance company for years or even decades, they may be comfortable staying where they are. However, people that are just entering the world of insurance may require the guidance that a broker offers. Insurance brokers are also well-suited to customers who want peace of mind knowing they are purchasing the best possible coverage at the lowest possible price.
To help you determine whether an insurance broker or agent is right for you, ask yourself a few questions before getting started:
- Is this my first time purchasing insurance?
- Is my top priority convenience or cost?
- Do I have the time to obtain quotes and compare insurance options?
- Will I want to modify or add an endorsement or rider to my policy in the future?
- Do I have specific or complex insurance needs?
- How accessible do I need my insurance provider to be?
- Do I anticipate having to make a claim in the near future? If so, do I know how to file a claim or will I need help with this?
How to find the best insurance professional for you
Once you have decided between an insurance agent and an insurance broker, you will still need to find the right one. Whoever you choose should represent you and your needs. They should be accessible and available to speak with you when needed, whether over the phone, by email, or in person. They should explain your policy to you in detail and be able to answer any questions you have. Ultimately, the insurance professional you choose should be someone you trust and who makes you feel comfortable.
To find this person, we recommend starting with some research. Find the websites of several professionals, companies, or brokerages in your area to compare product offerings. From there, find online reviews and see what other customers' experiences have been like. Based on these reviews, narrow down your list of potential candidates.
The next step is to start contacting potential insurance companies or brokerages. Consider how quickly they respond to you and the way in which they communicate with you. They should never rush or pressure you into making a decision. Oppositely, they should take the time to listen and understand your unique insurance needs. Don’t hesitate to ask them any of the questions listed above. The purpose of contacting potential insurance organizations is to interview them and determine if they’re the right fit.
Ultimately, finding an insurance advocate can be challenging. But it’s also incredibly worthwhile, and with a little research, you should be able to find the broker or agent that’s right for you in no time.
Contact BrokerLink for a free insurance quote
As you weigh your options, we invite you to take advantage of BrokerLink’s online quote tool. Using this tool, prospective customers can receive a free quote on whatever type of insurance they are looking for. All BrokerLink insurance quotes are accurate, competitive, and 100% obligation-free.
Beyond our free quotes, BrokerLink is here to answer any questions you may have about what it’s like to work with a broker. We explain what distinguishes us from insurance agents and offer unbiased advice on the best type of insurance for you and your family. Contact BrokerLink today to learn more about insurance brokers and coverage in Canada.