The main difference between an insurance broker and an agent is that an agent represents the insurance company, while the broker represents the insurance buyer, an individual, or a business.
So What’s The Deal With Insurance Brokers?
Brokers don’t carry contractual obligations with any one provider, so they can reach out to several insurance companies to find the best fit and cheapest policy for their client’s unique situations.
Most brokers can complete your insurance policy and provide you with the insurance documentation in less than 24 hours. This can vary based on the insurance company and the type of insurance you are buying; in some cases, you can receive the official documents immediately, whereas, in others, you may receive a ‘Binder of Insurance,’ an interim document guaranteeing coverage.
Advantages of dealing with an Insurance Broker can include: a third party to contact in the event of a claim, a larger pool to remarket with if your insurance needs change and the guarantee that you will always get the best price and coverage available to that broker, even if it means switching insurers.
Brokers must also maintain full licenses in their respective provinces, which means they must training hours. Your broker will have the most up-to-date knowledge of the insurance marketplace. As they also deal with various markets, their insurance knowledge base tends to be diverse.
And What About Insurance Agencies?
As we mentioned, an insurance agent has a contractual obligation to a specific insurance company. Their loyalties lie with the insuring company first and with the insurance buyer (you) second. Agents generally align with a single company and have excellent product knowledge of the policy they sell based on their close ties and policy focus.
Captive agents have the luxury of a great deal of support from the parent company. Frequently this comes in the form of financial assistance for office space, overhead expenses, employee benefits, etc. The extensive product training includes marketing materials, promos, campaign assistance, and detailed seminars. However, they are still bound to a single group of policies that might not be the best fit for your unique situation. Sometimes a parent company may discontinue specific policies or raise rates, and you may need to look elsewhere without comparable companies to move laterally.
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