Purchasing insurance is an important step in safeguarding the likes of your possessions, life, or business. Due to this, finding the right insurance is vital, but the process can be overwhelming to many.
That’s where insurance brokers and agents can help. They can both guide you through the process and find the right policy for you. But what are the differences between them and which one is right for you?
That’s what we’ll find out right here, so read on to find out more as we look at insurance broker vs. insurance agent.
The Role of Insurance Brokers
An insurance broker is an independent intermediary who can help to connect an insurance company with an insurance buyer. Simply put, an insurance broker will work with you to find the best insurance policy for your needs.
Crucially, an insurance broker doesn’t work for any specific insurance provider. Instead of representing the interests of an insurer, they represent the interest of anyone seeking insurance. Let’s take a closer look at the insurance broker roles and responsibilities.
Perhaps the biggest difference between insurance broker and agent is a broker’s independence. They are not bound to any specific insurance company or product. That can give you more confidence that their advice is coming from a more genuine place.
That impartiality ensures they can offer a more diverse range of insurance options and give more bespoke advice. It allows a broker to focus on a client’s specific needs rather than trying to promote their own company’s products.
2. Client-Centric Approach
An insurance broker is going to be much more client focused. This allows them to be more attentive to the client’s needs, understand their circumstances, and what is best for their life situation. Agents will often need to think of how a client’s needs can fit one of their products.
With a high-quality broker, they will assess financial situations and risk tolerances before recommending appropriate solutions. This more personalized approach means it’s more likely for a client to get coverage that perfectly aligns with their circumstances.
3. Extensive Market Access
An insurance broker isn’t limited by insurance companies or products. They will have access to a wide network of different insurance carriers. This can include well-known providers but also niche ones that may give you a better deal.
This market access allows a broker to compare policies, coverage options and premiums. Ultimately this leads to clients being able to make more informed decisions with a higher level of confidence.
4. Negotiation and Advocacy
Brokers act as advocates for clients, meaning they will act on their behalf. It’s a mutually beneficial arrangement that sees the broker being paid a commission from the insurance company and the client getting expert advice and tailored coverage.
If a client faces any challenges with their insurance policy, then a broker will be there to offer support and guidance.
The Role of Insurance Agents
In contrast to a broker, an insurance agent is not independent. They work on behalf of specific insurance companies and will try to obtain clients for them. They will work to connect you to one of the company’s products. Let’s look at the key characteristics as well as the insurance agent roles and affiliations.
1. Tied to a Single Insurer
Insurance agents are tied to a single insurer meaning that they exclusively represent them. As a result of this, they are limited to only offering the products and coverage options provided by the company they are working for.
2. Product-Centric Approach
Rather than a client-centric approach, insurance agents are more product-centric. This means they are focused on the products they offer. Simply put, instead of trying to match a client to a product, they match a product to their client.
3. Direct Sales
Insurance agents are direct salespeople who will try to reach new clients in a wide variety of ways. This can be ideal for customers who want a one-stop-shop as they can buy an insurance product directly, but options may be limited.
4. Limited Market Options
If you know exactly what you want when an insurance agent can do a good job of providing it. However, most people prefer to have a wide range of options to make an informed choice but an insurance agent can’t provide that.
Generally, insurance agents are paid through commissions. They’ll get these through the insurance company, and they are determined by the policies they sell. The exact nature of this commission structure can change from one insurer to the next.
Which One Should You Choose?
If you need to decide between a broker and an agent, then which one should you go for? The answer will depend on your circumstances and what you are looking for. Here we’ll see when a broker or agent would be right for you.
When to Choose an Insurance Broker
It’s best to choose an insurance broker when you want unbiased and independent advice. They will give you a more personalized service and will be focused on finding the perfect product or coverage options for your circumstances.
They will support you through the process and put your interests first. Along with this, they can help if you have complex insurance needs or specialist risks. If you have any doubts about getting an insurance policy, a broker will be there to help.
When to Choose an Insurance Agent
An agent can be better for those who want a quick and straightforward insurance buying process. If you’re not interested in knowing your options and already have a preferred insurer, then choosing an agent can be a one-stop solution.
There are two scenarios when an agent can be a good idea. The first is if your insurance needs are very basic. The second is if you already have in-depth product knowledge and don’t require the expertise of an insurance broker.
In the world of insurance, both brokers and agents can play a crucial role in connecting customers with the right insurance products. Using our guide above, you can see which one is going to be the best option for your circumstances.
If you decide that an insurance broker is right for you, then get in contact with Marathon Insurance today. We’ll offer you bespoke advice and ensure that you get insurance that is perfect for the needs of you and your family.