Why Choose an Insurance Broker

November 25th, 2015

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Insurance Brokers Association of Canada

For many of us, the search for affordable insurance starts online. We enter our details, look for the cheapest price, and make the call or click the button. But this is where you need to stop and consider: Who am I actually buying from, and more importantly, why should I care?

Truth is, you have plenty of insurance choices. You can choose the type of coverage, how often you pay your premiums, and even the size of your deductible (and, hopefully, realize a bit of savings). But the biggest choice you’ll make is whether to buy insurance from an insurance agent or an independent insurance broker.

Wait a minute, aren’t both of these insurance professionals selling insurance? Yes, but agents and brokers operate in drastically different ways—and this can impact how you do business with them and what you can expect from them.

Let’s look at the main differences between insurance agents and independent brokers:

#1: Selection

An insurance agent—also known as a direct agent or direct writer—represents only one insurance company. That’s because insurance companies do not, technically, sell directly to the public. You can’t call up an insurance company and ask for insurance. Instead, you speak to a representative of that company—an insurance agent, who is employed by the insurance company and is limited to selling insurance coverage only offered by that one company.

An independant insurance broker, on the other hand, represents more than one company. By maintaining relationships with several providers, these brokers aren’t limited to a finite selection of insurance coverage. Instead, they can shop the market to find the right policy at the most competitive price.


#2: Choice

Because an insurance agent works for only one company, he or she is limited by the selection offered by only that company. So, if an insurance provider doesn’t offer comprehensive sewer backup coverage, you, the customer, won’t get comprehensive sewer backup coverage—even if this coverage is readily available through other providers in the marketplace.

Independent insurance brokers, on the other hand, represent several providers. Brokers have a much wider selection of policies and coverages to choose from, which enables them to find the best coverage at the right price. This means they can work closely with you to customize your insurance policy to meet your specific needs, including adding coverage for what’s important and deleting what is not!

At this point, insurance agents will say that they can usually offer coverage at rock-bottom prices. But that doesn’t mean independent insurance brokers aren’t competitive. By becoming experts at insurance and maintaining solid relationships with several insurance companies, brokers can shop the market to find better coverage at more affordable rates. Remember, cheapest is not always best - but if you want rock bottom, a broker can find you rock bottom!

#3: Representation

One final difference separates the insurance agent from the insurance broker: Who they ultimately represent.

An insurance agent is employed as part of an insurance company’s sales team. Agents’ only role is to sell you an insurance policy; they do not represent your interests should you need to make a claim; they cannot offer advice should you need guidance during the claim process; and they typically will not offer suggestions on how to reduce your insurance premiums.

An independent broker, however, is not employed by any insurance company. As the title suggests, these brokers are independent—and that means they have the freedom to work for you, their client. This is important not only when you’re first buying your insurance policy—because they’ll work hard to make you happy—but also as you build your insurance history, because an independent broker is with you every step of the way. In fact, brokers will often conduct annual or biannual check-ins with their clients to make sure that nothing has changed and that all insurance needs are being adequately met.

Brokers will also flag possible ways to save—including making suggestions on when you should switch insurance providers because costs are going up or because coverage is going down. By working with an insurance broker, you have a knowledgeable representative who can keep abreast of any changes and help you find the best insurance for your needs, while taking advantage of every possible savings opportunity.

But a broker’s role doesn’t end there. As your representative, your broker will step in as your advocate should you need to make a claim. They’ll make sure adjusters are on track with your claim assessment, they’ll ensure that all damage or costs are taken into consideration, and, quite often, they’ll act on your behalf should your claim be bogged down with potential problems.

So, the next time you go shopping for insurance, remember: Are you buying from an agent? Or a broker? Because what you get and what you buy will dictate how you’re covered—now and in the future.


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