If you need insurance (which everybody does), you’ll need to know where to look. And more importantly, who to look for. For example, you’ll need to know the difference between an insurance broker and insurance agents. Although they sound like they could offer the same services, they could not be more different.
An insurance broker sells insurance, but they partner with several different insurance companies. So they’re not employed by a single company—they’re an independent business owner. This is good for two reasons:
- the broker has access to a bunch of different insurance products, meaning you have a lot of options
- their main concern is to get you the best insurance for your situation because they can shop around
Another good thing about brokers is that they’ve dealt with many insurance companies and they know which ones are the best. If a company has bad customer service or a poor selection of products, the broker won’t work with them. They’ll only work with what they think are the best companies. This means you get to choose from the cream of the crop—the best of the best.
And of course, a broker has to go through intense education, take licensing exams, before officially registering as a broker. They also need to join an insurance brokers’ association. Basically, not just anyone can do this job.
So how much do a broker’s services cost?
Nothing. That’s right—zero dollars. You don’t have to pay a broker because the insurance companies they work with pay them fees for selling their products to you.
The main difference between insurance agents and a broker is that an agent works for one insurance company. One comforting thing about working with an insurance agent is that they will know the company’s products in great detail because those are the only products they are required to know about. But on the flipside of this, you have to keep in mind that an agent won’t have as wide a selection of products and services as a broker does.
Agents, like brokers, have to complete rigorous training, but they’re actually not required to finish as much education as a broker. Also, like a broker, an agent won’t charge you for services as their employing company pays them.
So, which is Better?
It really comes down to what type of insurance you need and how much you can spend on insurance. Also, if you know exactly what type of insurance you need, an agent may be a better option—that way you can work with an insurance company you know and trust.
If you only know what insurance you need generally, definitely go with a broker. They will be able to help you find the right product or service among the many respectable companies they’ve partnered with.
Either way, you won’t have to pay insurance agents or an insurance broker any fees because they get paid by the company(ies) they work with or for. So you can get as many insurance quotes as you want.
The best plan of action might be to speak with both an agent and a broker to see which one can get you a better deal and a better insurance package.
Featured Image: depositphotos/Maridav