Insurance Agent Vs Broker

Insurance Agent Vs Broker: The Difference in a Nutshell

What is the difference between an Insurance Agent and a Broker?

Both are insurance specialists who sell Property and Casualty Insurance helping the insured purchase insurance coverage from the Insurer (Insurance company).

An Agent(or captive agent) works for one single insurance company, and is paid to sell insurance policies through that company only.

An Independent Agent or Broker works with or is contracted with several insurance companies, with the responsibility of representing both the Insured and Insurer’s best Interests. This means that brokers are not just out for your money to make a quick sale for the insurance company, they represent the Insured’s (you), best interests as well.

How can Insurance Brokers Still get paid if they do not make a sale?

Many Insurance brokers work on commission, but may have an hourly base pay or contract with the Insurance companies. This means, brokers do not have to charge you an additional fee, and they are not pressured to sell you a policy just to get paid. Don’t count it out as a career choice!

Insurance Agent Vs Broker: Property and Casualty Insurance Experts

An Insurance Agent and insurance Broker must BOTH be licensed in each State they do business in, and comply with all governing statutes and regulations.

They can specialize in one type of Insurance, to several types of insurance within the Property and Casualty lines. Some of the types of Insurance may include the following:

  • General Liability Insurance
  • Business Owner’s Insurance
  • Commercial Auto Insurance
  • Professional Liability Insurance
  • Workers’ Compensation Insurance

Insurance Agent Vs Broker: What is the best fit for me?

There are two types of Insurance Agents, Captive Agents and Independent Insurance Agents. Captive Agents represent one Insurance company’s products, and are paid a commission to sell to consumers.

Independent Insurance Agents represent more than one Insurance company and are paid commission to sell to consumers.

Insurance Brokers represent the consumers best interests, rather than that of the insurers, to find the best policy for their needs. A Broker’s responsibility is to examine several options, and can then recommend which Insurance company may be their best fit whether that is based on price, service, coverages, etc.  A Plus Insurance is a brokerage with several agents working for us.

Insurance Agent Vs Broker: Why pay more for better service?

Would you pay more for better customer service?

  • A recent survey indicated that 68% would pay more to the company that provides great service, 33% would pay 1-9% more, 27% would pay 10-20% more and 8% would be willing to pay over over 20% more if the service was great!  
  • Customers now love personalized service, fast problem solving and love to hear from an actual person on the phone lines instead of the IVR (Interactive Voice Response)
  • Its very simple, when a insurance company shows that their customers are valued, they will have a stronger emotional connection to your company and they wont mind paying more for your services.
  • Check with sites such as JD Power AMs Best to see Insurance rankings. These are professional rankings based on a wide variety of factors that ranks the best of the best Insurance companies.

Insurance Agent Vs Broker: Which companies Use Which?

If you are looking for a specific Insurance company, say Progressive, Geico, or State Farm, then a Captive agent may be the best fit for you. The captive agent can only sell you that company’s Insurance policy, no matter what the price is. They are based on commission and that may be ok with you because you want that company specifically. 

If you are open to options, and finding the cheapest price is important to you, then a Broker may be your best fit or an Independent Insurance Agent may be your best fit.

These professionals can search several Insurer’s to find the best coverage tailored specifically for you, and the best price. 

Last Updated on by Alexandra Vileikis