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Business & Finances

Insurance Agent vs. Insurance Broker: What Are the Differences?

Do you need to buy health insurance, auto insurance, life insurance, or one of the many other types of insurance that are out there? If so, you’ll have the option to purchase an insurance policy through either an insurance agent or an insurance broker.

Oftentimes, people make the mistake of thinking that an insurance agent and an insurance broker are one and the same. But in reality, there are a lot of key differences between an insurance agent vs. insurance broker.

So, what is an insurance agent, and what is an insurance broker? We’re going to answer these questions for you today in our insurance agent guide. It should help you to select the right person to lend a hand to you when you’re shopping for an insurance policy.

Continue reading to get the scoop on what separates insurance agents and insurance brokers.

What Is an Insurance Agent?

At the moment, there are hundreds of insurance companies scattered throughout Canada. These companies specialize in offering all the different types of insurance that we mentioned earlier—and more!

These companies also have independent insurance agents situated throughout the country that can help you if you’re interested in their insurance policies. An insurance agent is someone who has ties to a specific insurance company and assists those who would like to obtain insurance policies from it.

The biggest difference between an insurance agent vs. insurance broker is that agents maintain these connections to insurance companies while brokers don’t. It’s worth remembering that when you’re trying to decide whether you should call an insurance agent or an insurance broker for help.

How an Insurance Agent Can Help You

If you would like to try to buy an insurance policy through an insurance agent, you won’t have too much trouble finding one. There are thousands of them working within Canada today.

In order to help you understand why you might want to patronize one of these insurance agents, we’re going to break down how they can help you. Here are five ways in which an insurance agent can assist you when you’re shopping for an insurance policy.

1. They’ll Show You the Insurance Policies Available Through Their Specific Company

It doesn’t matter if you’re looking for auto insurance for yourself, health insurance for your whole family, or home insurance for your house. When you show up at an insurance agent’s office, they’re going to have a bunch of policies that you can check out.

An insurance agent will have a close working relationship with one specific insurance company, and they’ll be able to show you everything that this company can provide for you in terms of the insurance. They’ll be able to walk you through a handful of them from top to bottom while showing off their understanding of them.

2. They’ll Help You Figure Out Which Insurance Policies Would Be Your Best Options

While you’re sneaking a peek at all the different insurance policies that an insurance agent can show you, your head is going to be spinning. It can be difficult to grasp exactly what insurance policies cover, regardless of which type of insurance you want to get.

An insurance agent can shed some light on each of the policies that they walk you through so that you can comprehend the kind of coverage they’ll provide. They can break the policies down into layman’s terms so that you aren’t so confused. They can also listen to what your needs are and steer you in the right direction as you work to narrow your options down.

3. They’ll Compare Their Insurance Company’s Policies With Other Company’s Policies

To be clear here, an insurance agent is typically not going to have in-depth knowledge regarding all the insurance policies that other insurance companies offer. They won’t be able to give you as much information on other companies’ policies as an insurance broker can.

But an insurance agent can usually provide you with some very basic comparisons of the insurance policies that their company offers versus the insurance policies that other companies offer. It’ll allow you to conduct comparisons on your own to see which insurance company might be your best bet.

An insurance agent is obviously going to try to convince you to buy a policy from their insurance company. It’s why you might not want to put too much stock into their comparisons. But it’ll still be worth listening to what they have to say while they’re comparing policies for you.

4. They’ll Answer Any Questions You Might Have About Their Insurance Policies

An insurance agent is going to know the ins and outs of every single insurance policy that they show you. As a result, you won’t have to be shy about peppering them with questions about the policies they present to you.

If you’re not sure whether or not a particular policy will provide you with enough coverage, you can ask them about it. An insurance agent should be able to set you up with the answers that you need to make a smart decision in the end on which policy you want.

5. They’ll Aim to Help You Get Your Hands on an Affordable Insurance Policy

When you first sit down with an insurance agent, you should try to give them a general idea of how much you want to spend on an insurance policy. It’ll allow them to keep your budget in mind while perusing through policies that might work for you.

Insurance agents are in the business of trying to make as much money as they can by selling policies. But most of them will also take your budget into account and aim to find you a policy that you’ll feel comfortable with in a financial sense.

What Is an Insurance Broker?

At last count, there were more than 25,000 insurance brokers operating throughout Canada.

Unlike insurance agents, these insurance brokers are not directly affiliated with any insurance companies. Instead, they’re in charge of assisting those who would like to compare the insurance rates from a bunch of different insurance companies at once.

As we alluded to earlier, this is the most obvious difference between an insurance agent vs. insurance broker. You’ll have the ability to shop around more for insurance policies when you go with a broker as opposed to an agent.

How an Insurance Broker Can Help You

If you have a favorite insurance company and you would like to purchase all your insurance policies through them, you’re more than welcome to do it through an insurance agent. But if your goal is to get the best possible insurance policies for the most affordable prices, you’ll be better off with an insurance broker.

An insurance broker from a company like Shelter Bay Financial can cast a much wider net for you when you’re in the market for any kind of insurance. Here are five ways in which an insurance broker can assist you when you’re shopping for an insurance policy.

1. They’ll Show You Insurance Policies From a Variety of Companies

As you now know, there is no shortage of insurance companies in this country at this time. So when you’re buying an insurance policy, you should try not to limit yourself to just one company.

That’s what you’re going to get stuck doing when you use an insurance agent vs. insurance broker. But when you go with an insurance broker, they’ll be able to show you policies from as many insurance companies as you want.

An insurance broker will look high and low for the best insurance policies for you without giving any thought to which insurance companies they come from. Brokers won’t be obligated to only show you policies from one specific company.

2. They’ll Help You Understand the Insurance Policies Different Companies Offer

If you think that trying to figure out insurance policies from one company is difficult, just wait until you have to try to do it for policies from a bunch of companies! It’ll almost make you wish you just decided to work with an insurance agent.

But thankfully, an insurance broker will be able to take a deep dive into the various insurance policies that they find for you to help you understand them. They will make sure that you aren’t left scratching your head at any point during your search for a policy.

3. They’ll Find Ways to Bundle Different Types of Insurance Together

Did you know that you might be able to save some money by bundling a few different types of insurance together? Some insurance companies have started to create insurance bundles to entice people to purchase policies through them.

You can take full advantage of your ability to buy insurance bundles by having an insurance broker find them for you. They can sift through all the bundles that insurance companies have to offer and set you up with plenty of options.

You might not have it in you to go through this process yourself, no matter how much money it might save you. But with a great insurance broker by your side, you’ll get full access to all the best insurance bundles in the business.

4. They’ll Look For the Most Cost-Effective Insurance Policies Around

While an insurance agent will attempt to keep you under budget when you’re buying a policy through them, they’re obviously going to try to make as much money as they can on your transaction. So you shouldn’t be surprised if they try to sell you on a policy that might provide more coverage than it seems like you should need.

An insurance broker, meanwhile, is going to be working on your behalf to get you set up with insurance. So they’re going to try their absolute hardest to find the most affordable insurance policies for you.

You can rest assured knowing that you will get the best deal that’s out there when you have an insurance broker helping you. They aren’t going to try to sell you on a policy that you don’t actually need just to make a few bucks for themselves.

5. They’ll Lend a Hand If You Ever Have to File an Insurance Claim

In a perfect world, you won’t ever have to worry about filing an insurance claim. But in the event that you do have to go through with it, you’ll like knowing that you can call on your insurance broker for help.

The average insurance agent isn’t going to play any part in helping you to file insurance claims. But insurance brokers will hold your hand as you go through the insurance claim process.

Filing something like, say, an auto insurance claim can be a huge hassle if you don’t have a professional guiding you. You’ll find that it will be so much easier when you go with an insurance broker vs. an insurance agent from the start.

Insurance Agent Vs. Insurance Broker: Make the Right Decision Today

At this point, you know about the differences between an insurance agent and an insurance broker. You know the role that each one will play when you shop for an insurance policy, and you understand how they can each help you when you go with them.

The only thing left to do is to make the decision between an insurance agent vs. insurance broker. You can begin shopping for the insurance policy that you need once you bring one or the other onboard to assist you.

Get more tips on purchasing insurance policies by browsing through our other blog articles.

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