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Insurance Agents vs. Insurance Brokers: What's the Difference?

Whether you’re getting insurance for the first time or you’re looking for a new insurance company, you’re most likely filled with questions. One friend recommends her insurance agent, while another recommends getting an insurance broker. Is there a difference or are they the same professional with different names? Get the facts here.

What Type of Insurance Policies Do They Each Offer?

The type of insurance an agent or broker can sell you depends on what type of insurance agent you have. Brokers generally deal with many insurance companies so they can offer a large selection of insurance policies. Insurance agents may also work with many different companies, but only if they’re independent insurance agents.

If they’re what are known as captive agents, they work exclusively for one insurance and only carry the insurance policies that company offers. Insurance brokers and independent insurance agents may offer the following types of insurance policies:

  • Health insurance
  • Long-term care insurance
  • Short and long-term disability insurance
  • Life insurance
  • Homeowner’s insurance
  • Auto insurance
  • Commercial insurance

How They’re Similar

  • Insurance brokers and insurance agents can both begin their careers with high school diplomas and some additional training.
  • Insurance brokers and independent insurance agents both work for several companies.
  • Insurance brokers and insurance agents both need to licensed in the states in which they work.
  • Insurance brokers and insurance agents can both offer a variety of different types of insurance e.g. home, life, health, and auto.

How They’re Different

  • Insurance brokers usually have a little more training than insurance agents.
  • Brokers can work for several companies whereas captive insurance agents work for one company.
  • Brokers work on the customer’s behalf, whereas insurance agents work on behalf of the insurance companies.
  • An insurance agent’s responsibility is only to sell the amount of insurance a customer wants, whether it’s an adequate amount or not, whereas a broker’s responsibility is to determine how much the customer needs.
  • Brokers generally have more experience in the insurance industry.
  • Brokers usually charge an administrative fee for their services, whereas insurance agents do not.

Which One Is The Best Choice?

Choosing insurance can be a big enough decision for a consumer without the added worry of wondering whether to get an insurance agent or an insurance broker, especially when many people don’t know the difference. Today, many people go without insurance or are under-insured because of the potential cost and current economy. They may also have heard horror stories about how expensive insurance can be.

Choosing insurance, particularly affordable insurance, doesn’t have to be a huge endeavor if you have a reputable individual working for and with you. While both brokers and insurance agents can find you the type of policy you need, individuals shopping for the first time may benefit more from a broker. The reason for this is because the broker is working for you and on your behalf so he or she is going to look for the very best deal for you.

Last Updated: March 30, 2017