When buying insurance, should you go with a broker or an agent? (2024)

FAQs

When buying insurance, should you go with a broker or an agent? ›

Working with a life insurance agent can be an efficient way to purchase a specific policy, while consulting with a broker can help you narrow down your options and compare quotes from multiple companies.

What are the disadvantages of using an insurance broker? An insurance broker typically doesn't know all the policy details for every policy type and insurance company. There could be policy exclusions, terms and conditions they may not be aware of when suggesting an insurance company or specific policy.

Brokers are tuned in to the insurance marketplace and can evaluate all of your available options to keep costs down and avoid a lapse in coverage. Speed is the primary benefit of working with a broker, says Sean Lovison, a New Jersey-based certified financial planner.

Buying online could also be cheaper because you won't pay agent commissions or other fees as you might when obtaining an auto policy in person. However, you could also miss out on potential savings by not working with a knowledgeable insurance agent in person.

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.

insurance carrier. Brokers are typically responsible for advising clients about what type of insurance coverage they need, comparing policies from different insurers, negotiating with carriers on behalf of their clients, and helping them find the best possible rates. Brokers perform many tasks and fill many roles.

As an independent insurance agent, you are basically your own boss. You have the freedom to decide how you want to run your business. On the flip side of that, however, you won't be given paid time off or sick days. The same goes for holidays.

Brokers make it easy for you because they know banks, bankers, loan products and loan terms. They can sift out what's going to work for you, and what isn't. They know where to go, and what you need to provide, to get you the finance you're looking for. Brokers make it easier for the lenders to say yes.

Insurance brokers understand and assess your risk, using their expertise to review all options and tailor cover to match your risk, cost effectively. Brokers deliver personalised service because they take the time to understand your business and build long term relationships.

Some insurance buyers prefer to go it alone, while others with more complex needs or questions will benefit from the assistance of an insurance broker. Here are some reasons you could benefit from working with a broker. You don't want to spend time sifting through and comparing insurance quotes.

Is it better to go with a local insurance company? ›

Local Insurance Agencies Understand the Area Best

Also, insurance regulations and legislation change from state to state. Therefore, what may be a legal requirement in one state may not be a legal requirement in another, which shows why local knowledge is so critical.

It's usually a percentage of the policy's premium, but it varies based on the policy type. What percentage of insurance premiums go to the agent? On average, between 5-20%, depending on the policy and terms set by the insurer.

Independent insurance agents are third-party salespeople who have a relationship with multiple companies and get paid a commission when they sell you a policy. Because they aren't bound to a single insurance company, they can help you compare options across several carriers to find the right policy for you.

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.

An insurance broker acts as an intermediary between you and an insurer. Armed with both your background and their insurance know-how, they can find a policy that best suits your needs for a reasonable price. While brokers can save you time and money, you may have to pay a broker fee for their services.

An insurance broker works for you, not an insurance provider. That means they partner with small business owners as their trusted advisors. They give expert advice, help define and explain the details of an insurance policy and recommend coverages and coverage limits.

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.