Insurance Agent vs. Insurance Brokerage - Which is Best for You?

Choosing the right insurance isn't always an easy decision due to the variety of options available. Knowing the various differences between an insurance agent and an insurance brokerage is important in helping you find the best insurance coverage to meet your needs. Many people use these terms interchangeably, but there are quite a few differences between an insurance agent and an insurance broker.

What is an Insurance Agent?

An insurance agent will represent an insurance company for selling plans to potential buyers. Insurance agents will provide information about available policies and will receive compensation for selling specific insurance plans. There are also two different types of agents, which are known as captive or independent agents. A captive agent will only represent one insurance company, while independent agents can sell policies from several insurance providers.

What is an Insurance Broker?

An insurance broker is an independent insurance professional that legally represents the buyer to help them find insurance coverage to best meet their needs. One of the main differences in using an insurance brokerage is that they have a fiduciary duty in finding insurance that protects the financial interests of each client. Working with an insurance brokerage gives you the opportunity to choose from a variety of insurance providers, which is often more beneficial than using an independent or captive agent.

How Insurance Brokers Get Paid

An insurance broker doesn't receive a commission from a specific insurance company, which makes it possible for them to find the best coverage to meet your needs. On the other hand, an insurance agent usually gets a commission from an insurance carrier. An insurance broker will also obtain licenses from the state, as they are legally required to represent your best interests.

One of the main focuses of an insurance broker is to build long-term relations with customers while helping them find the best coverage available. A broker will often receive an extra commission whenever you renew your policy, as keeping each customer happy with the best coverage available is always a top priority.

Why You Should Consider Insurance Brokers

Choosing to work with an insurance brokerage is a great option for many people compared to only using an insurance agent. An insurance brokerage offers a variety of benefits while providing an objective risk assessment in helping you choose the best coverage to meet your needs.

Here are a few more of the main advantages of using an insurance brokerage.M.

Simplifies Insurance Selection Process

One of the top benefits of using an insurance brokerage is that they will work with you in finding the best insurance from a variety of providers. An experienced broker will guide you throughout this entire process and help you compare numerous options. A broker can easily analyze the risks for each coverage to help you make a decision that's in your best interests.

Impartiality

The goal of a captive agent is to sell you a particular policy. However, an insurance broker will remain impartial, as their duty is to look out for your best interests. Working with a local insurance broker allows you to gain a clear overview of all your available options, whether you need auto, business, property, motorcycle, boat, travel, or umbrella insurance. Getting honest advice and feedback for these available policies is invaluable in searching for the best insurance coverage.

Claim Assistance

An insurance broker can also act as your advocate throughout the claim settlement process. You will have peace of mind knowing that a qualified and licensed insurance broker will act on your behalf to settle any claims on your insurance policy. It's always in the best interests of an insurance brokerage to help you get a fair and quick settlement to avoid any additional legal fees and keep stress to a minimum.

Saves You Time

Looking for the right insurance coverage is often a time-consuming process for most people. It's often easy to feel overwhelmed due to the wide range of options. Using an insurance brokerage is a great way to save yourself a lot of time in helping you choose the best options available for you. An insurance broker will work with you throughout the entire process, and you can always reach out to them at any time if you have any questions.

Final Thoughts

Understanding all of the different terms in the industry can often be confusing. Knowing the differences between using an insurance agent and an insurance broker is important in helping you find the best insurance to meet your needs. Both of these options offer different services, as working with an insurance broker is often a better choice than using an insurance agent to ensure you obtain the most affordable coverage. Learning more about the differences in these services is essential in saving you money while also enabling you to get the best coverage to meet your needs.