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

by Bridget Coila
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When you're on the hunt for a good insurance plan, choosing an insurance agent or insurance broker is often the first step.

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Knowing how brokers and agents work helps you understand the differences so you can choose the best option for helping you get the coverage you need.

What Is an Insurance Broker and What Do They Do?

An insurance broker is an intermediary between you and the many companies that provide insurance coverage in your local area. Because brokers represent many companies, they may be able to help you find a good deal by comparing the costs and benefits of multiple plans from a few different companies.

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What Is an Insurance Agent and What Do They Do?

An insurance agent is often an employee of a single insurance company who helps you understand and choose between the insurance products offered by that company. Some insurance agents work freelance for multiple companies, but they can only connect you with insurance products from the specific companies they represent.

What Are the Differences Between Insurance Agents and Insurance Brokers?

The main difference between insurance agents and brokers is who they represent. While both types of insurance professionals help connect you with the policies you need, they operate differently. An insurance agent represents a single company or specific set of companies and acts in the company's best interest, while an insurance broker represents the consumer who's searching for an insurance plan and is incentivized to find you the best deal.

Brokers act as intermediaries between insurance agents and consumers instead of selling you an insurance plan. In some ways, a broker is more like an insurance advisor than someone who directly sells you insurance.

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What Is Insurance Brokerage?

The insurance industry can be complicated whether you're purchasing vehicle insurance, health insurance, disaster insurance for your small business or home insurance for a rental property. An insurance brokerage retains multiple insurance brokers who may specialize in specific types of insurance, so you can find someone with extensive knowledge about the kind of insurance you require.

Business insurance tends to be more complex than individual insurance, and those trying to obtain policies for commercial property insurance, liability insurance or business interruption insurance may benefit from the expertise of an insurance broker. Individuals with complex needs may also find that working with a broker helps them compare policies and understand coverage details.

How to Choose Between an Insurance Agent and a Broker

Choosing between an insurance agent and an insurance brokerage company depends a lot on whether you already have a specific insurance provider you want to use.

If you're committed to buying insurance from a specific provider, you probably need to contact an agent for that company to go over the available policies.

If you're unsure which insurance company to use or what type of insurance coverage you need, a broker may be able to provide multiple options and help you navigate the process of comparing plans and providers.

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