Insurance Broker vs Insurance Agent: What's the Difference?

What's the Difference Between a Broker and an Insurance Agent?

If you've been shopping around, looking for the best insurance options for your home, vehicle and other assets, you've probably noticed a vast array of choices out there—and not least of all is the conundrum of insurance broker vs. insurance agent. There's a lot of misunderstanding about what those two roles entail, and many people are unaware that there's even a difference.

But when it comes to the question of broker vs. agent, understanding the distinctions between them and choosing the right option for your particular needs can mean the difference between getting the ideal coverage you need for protection against financial loss or ending up with an insurance package that doesn't address your specific requirements for coverage. That's why it's essential to clearly understand the full insurance broker vs. insurance agent picture before you decide.

What is an Insurance Broker?

An insurance broker is a type of insurance professional who represents individuals or businesses that need insurance coverage. Rather than promoting the products and interests of one or multiple insurance companies, insurance brokers have a fiduciary duty to their customers. That means they are obligated to act in the best interest of their clients. Insurance brokers can be independent or part of a brokerage firm such as Morison Insurance. Because brokers don't work for insurance companies, they can't bind insurers into a contract without going through a representative of the insurance company.

When it comes down to insurance broker vs. insurance agent, keep in mind that there are three general types of insurance brokers:

  • Retail Brokers: Retail brokers, like the ones at Morison Insurance, work closely with clients to understand their unique insurance needs and seek out the best possible coverage to ensure their financial protection against loss. They typically work with common types of insurance such as home and auto.
  • Wholesale Brokers: Wholesale brokers focus on specialized types of insurance designed to offer coverage for complex risk exposures and sell them to insurance agents and retail brokers. They do not work directly with the end-users of insurance, or in other words, policyholders.
  • Surplus Lines Brokers: Surplus line brokers may be either retail or wholesale brokers, but the difference is that they search out coverage for clients with significant risk exposures beyond what typical insurers are willing to take on. For example, a business with an extensive claims history and notable losses may need to go through a surplus lines broker to get coverage.

When you're thinking about insurance brokers vs. insurance agents, the most important thing to understand is that brokers work for you, not the insurance companies. We will take the time to learn about your unique lifestyle and property or how you choose to operate your business and tirelessly seek out the best possible insurance options so you can have the peace of mind that comes with knowing you are protected against financial loss. Your insurance needs are one-of-a-kind, so your insurance coverage should be uniquely tailored to meet those needs and offer you the protection you deserve.

What is an Insurance Agent?

An agent is an individual who acts on behalf of a person, group or company, and an insurance agent is a professional who represents a single insurance company (or, in some cases, multiple insurers). An insurance company employs them to represent that company to customers and sell their products. Naturally, this means their loyalty is to the insurance company that employs them, and their overall goal is to get clients to buy the insurance offerings that the company provides. Because insurance agents directly represent a specific insurer, they can bind that insurer into insurance policy contracts without going through a third party.

When pondering insurance broker vs. insurance agent differences, it's important to note that there are two broad categories of insurance agents: captive agents and independent agents.

Captive Agents

While the title may be alarming, there's no need to worry—captive agents are simply agents who work for a single insurance company. As insurance company employees, they receive support from their employer that ranges from office space and HR benefits to client leads and referrals. In return, they only promote and sell insurance products from their employer. That means they are knowledgeable about their company's offerings and likely have insightful, up-to-date information about them. On the other hand, they probably don't know much about alternatives on the insurance market and wouldn't tell you about them if they did because they are focused on selling you their company's products.

Independent Agents

Unlike captive agents, independent insurance agents work for multiple insurance companies, and as a result, they can offer a much more comprehensive range of insurance products than captive agents. They may also offer additional benefits such as advice and claims support. While independent agents are similar to brokers in some ways, there's a critical difference worth noting when considering the insurance broker vs. the insurance agent: independent agents still work for and represent insurance companies. In contrast, brokers represent you, the prospective policyholder. An independent agent isn't locked into working with only one company, but they still prioritize the needs of the companies they represent rather than the customer's needs.

What’s the Difference When It Comes to Insurance Broker Vs. Insurance Agent?

We get asked this question often. It is sometimes believed that these two jobs are the same. This is not true. Significant differences can impact you in terms of insurance prices and service. If you are currently thinking about the insurance broker vs. insurance agent question, here are the key points you need to know to make an informed decision about what's best for your insurance requirements.

Brokers Focus On Getting the Best for You

The main difference between an insurance broker and an agent is choice and independence. Morison Insurance is an insurance brokerage. We are independent, and we represent over two dozen insurance companies. We work for you, our customer. We are independent. We “shop” our many companies to get you the best policies and prices. At Morison Insurance, we shop, and you save. We shop dozens of companies to find the coverage that fits your unique needs and look for the best price. That is our commitment.

An agent and direct writers—such as banks—represent only one insurance company. These are often call centres with salespeople employed by one insurance company. There is no comparison shopping for other coverages and prices. The customer gets one price from one company. How do you know you are getting the best price? Fact: You don’t. How do you know you will get good after-sale service? Fact: You don’t. At Morison Insurance, the person on our team gets you the best price from many companies, and we provide outstanding service to every customer. We get to know our customers, and we look after your needs.

A Broker's Loyalty Is to You

As insurance brokers, we are objective. We are not employed by any of the insurance companies we represent. Our brokers’ only allegiance is to get the best insurance for the customer. Insurance brokers have in-depth insurance knowledge, provide personal service and are licensed and trained through the Registered Insurance Brokers of Ontario. We are members of the Insurance Brokers Association of Ontario (IBAO), representing a network of independent and professional brokers across the province.

We Are Ontario’s #1 Insurance Broker

We are a multi-award-winning brokerage. Our awards come from residents in the communities we serve AND from the Insurance Brokers Association of Ontario (IBAO), the local group representing thousands of brokers across Ontario. The IBAO has recognized us as Ontario’s #1 Broker for, among other things, our service excellence, our commitment to our customers, and our outstanding team of professionals. With that in mind, the decision of insurance broker vs. insurance agent is simple.

Our brokers are well-trained to assess your insurance needs. In the event of a claim, we are committed to helping you with the claims process from when you claim seeing it through to a fair resolution as quickly and effortlessly as possible.

At Morison Insurance, our brokers live in the communities we serve. That means we know about the challenges people face in local areas, and we are familiar with the particular insurance needs of Ontarians. We are also NOT a call centre focused on sales only. We get to know our customers, and we care. We are always available to answer questions, change your policy, and provide other necessary insurance services. We have a 24/7 claims service. Every customer accessing our free insurance app receives our electronic newsletters with insurance tips, savings ideas, and other exclusive extras.

Let Our Expert Brokers Look After Your Insurance

When it comes down to the insurance broker vs. insurance agent question, the answer is clear—trust our experienced brokers to take care of all your insurance needs. We are pleased to provide you with a quote online, on the phone or in person. Let us know what works best for you. We will shop our companies for the right coverages and the best prices. We will also compare discounts to get an even better price whenever possible. Get in touch with us at 1-800-463-8074, or request a quote online to learn more about how we can address your unique insurance needs.

This content is written by our Morison Insurance team. All information posted is merely for educational and informational purposes. It is not intended as a substitute for professional advice. Should you decide to act upon any information in this article, you do so at your own risk. While the information on this website has been verified to the best of our abilities, we cannot guarantee that there are no mistakes or errors.

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