Insurance Agent vs. Insurance Broker: What’s the Difference? - Experian (2024)

FAQs

Is there a difference between an insurance broker and an insurance agent? ›

While both agents and brokers act as intermediaries between insurance buyers and the insurance market, and can offer insurance quotes on different policies, there are two key differences between the two: Agents represent insurers, while brokers represent the client.

There is no constant winner between buying insurance from a broker or direct for all situations. Some customers may decide that the best option for them is a combination of working with an agent and then making their final decision by purchasing a policy online.

For instance, brokers might not have access to every insurer on the market, potentially limiting your options. They may also charge a fee for their services, which might not be cost-effective if your insurance needs are relatively straightforward.

Although brokers sell insurance, they don't work for one insurance company as an agent does. Instead, they work for you to find the most suitable policy that meets your specific needs. Brokers don't underwrite insurance policies.

Insurance brokers can help individuals and business owners make sense of their insurance choices. Unlike independent agents who represent the insurance companies they work for, brokers focus on your needs. They work with you to learn more about what kind of insurance you're looking for and then present solutions.

To put it briefly: A real estate agent is licensed to help people buy and sell real estate and is paid a commission when a deal is completed. The agent may represent either the buyer or the seller. A real estate broker does the same job as an agent but is licensed to work independently and may employ agents.

Online car insurance policies are generally cheaper than those offered by insurance agents as these don't include commissions and other fees. Most auto insurance companies also offer discounts if you purchase car insurance online. However, using an agent has its share of benefits.

The first thing a broker will do is meet you and get a better understanding of what it is you want. Brokers are, after all, your finance professionals, so the better they get to know you, your financial circ*mstances and long-term goals, the better they can match you with a product that is right for you.

A one-on-one meeting with a local agent can point out any gaps in your coverage, and help make sure you are covered for contingencies. Independent agents deal with multiple insurance carriers so you will be offered options. Agents also make sure you receive group discounts when applicable.

Misrepresenting what's in your policy: Agents should be well-versed in the policies they sell. An agent makes a material misrepresentation when they lead you to believe you're covered for something not included in the policy.

How many insurance brokers fail? ›

A more accurate statement is that 93% of agents choose to leave within three years. Today, we're discussing the primary reason I believe agents are leaving this business. Before diving in, I want to share my inspiration for this article.

An insurance broker is an intermediary who sells, solicits, or negotiates insurance on behalf of a client for compensation.

So what's the catch? There is no catch for the consumer. By law, California health insurance agents and brokers are prohibited from charging a fee for their services to consumers. The price of your plan is the same whether you use an agent or not.

Insurance agents and insurance brokers can both help you buy an insurance policy. But insurance agents represent the insurance provider that employs them and help sell policies from that single provider. Insurance brokers represent the consumers who use them and can help them shop for policies from multiple providers.

For example, a broker offering personal lines of insurance can usually help their clients get home, car, life, and travel insurance. A commercial insurance broker would specialize in the insurance needs of businesses rather than individuals.

Agents represent final buyers while brokers represent marketing intermediaries.

An insurance broker is an intermediary who sells, solicits, or negotiates insurance on behalf of a client for compensation.

Insurance producers or agents represent insurance companies. By contrast, insurance brokers represent insurance buyers. In other words, producers look for clients who will buy insurance products, while brokers look for insurance products that will meet their clients' needs.

A broker is an independent person who may place business with any number of insurers while an agent represents one company. Define a general agent. A general agent has authority from a company to manage all of the company's business within his or her territory.