The insurance industry can be confusing. Policies tend to be written in a specific form of legalese that many people find cryptic. Even a simple inquiry – like figuring out the differences between an insurance agent and an insurance broker – can quickly become tangled in unfamiliar verbiage.
That’s where Williams & Case can help! We specialize in using plain language while harnessing our insurance expertise to take the confusion out of getting the right coverage for your unique needs.
We took the initiative to break down a basic definition of both insurance brokers and insurance agents, outline some pros and cons for working with each, then offer insight into situations where these types of insurance professionals shine.
Whether you’re on the hunt for customized business insurance or tailored personal coverage, understanding how to choose an insurance broker vs agent will help you navigate the process!
What Is an Insurance Agent?
An insurance agent serves as an insurance company representative, selling policies directly to customers. They are typically directly employed by the company or companies they represent and receive compensation in the form of either salary or commissions on sold policies. As experts on the offerings from only one or a few providers, agents can help their clients find the best coverage for their unique needs from those providers.
Agents are considered a “one-stop shop” for insurance needs, as they can help clients choose a level of coverage, then directly enroll them into a policy. They’re a convenient resource for tasks like adding someone to your car insurance policy or finding line item discounts for multiple policies under one provider.
Types of Insurance Agents
There are two types of insurance agents:
- Captive agents sell policies from only one insurance company
- Independent agents sell policies from multiple insurance companies
Pros & Cons to Consider
Upsides for going with an insurance agent include:
- Deep expertise on the plans and policies offered from one or a few providers
- Insight into ways to trim costs by bundling or combining types of coverage
- Convenience of shopping for and enrolling in coverage with one person
- Fee-free services for consumers
Possible drawbacks of working with an insurance agent include:
- Inability to compare coverage from a wide variety of providers
- Representing the insurance company, not always the consumer’s best interests
What Is an Insurance Broker?
An insurance broker represents individuals and businesses that need to shop for insurance policies from an array of providers. Many states impose fiduciary duty upon insurance brokers – meaning they are required by law to act in the best interests of their clients. Ohio is not one of those states, but some Ohio brokers undertake fiduciary responsibilities on their own.
Insurance brokers help clients by getting to know their specific needs for insurance coverage, analyzing their unique situation and risks, then making recommendations for policies that will fit their budget while maximizing coverage. Insurance brokers do not directly sell policies, but they can help clients secure coverage through an agent. They’re ideal for saving time and hassle when you have complex insurance needs, like getting multiple quotes before renewing business insurance or obtaining homeowner’s insurance.
Types of Insurance Brokers
There are two types of insurance brokers:
- Retail brokers work with individuals to determine their best options for health, home, car and other kinds of personal insurance
- Commercial brokers work with businesses to streamline overall risk management, employee health benefit plans and more
Pros & Cons to Consider
Benefits of working with an insurance broker can include:
- Personalized comparisons of policies from a wide array of insurance companies
- Unbiased advice on coverage and cost differences from various providers
- Streamlined claims management with expert attention to detail and minimal delays
- Proactive recommendations for policy adjustments as a client’s needs evolve
Possible downsides of going with a broker may include:
- Inability to enroll clients directly in policies
- Broker fees that may impact policy renewal rates
Insurance Broker vs. Insurance Agent
Here are the main differences at a glance for comparing insurance brokers vs agents:
Insurance Brokers:
- Represent insurance buyers
- Compare rates for home, business or auto insurance policies
- Work independently on behalf of consumers
- Help clients shop for insurance plans from a variety of providers
- Can help clients enroll in coverage through an agent
- Work on commission from an insurer
- May charge broker fees
Insurance Agents:
- Represent insurance companies
- Sell insurance policies
- Are contracted or employed by insurance companies
- Help clients find the right insurance plan from one or multiple providers
- Can directly enroll clients in coverage
- Work on commission or salary from an insurance company
- Are typically free for consumers
Should You Choose an Insurance Agent or Broker?
It’s not necessary to make a lifetime commitment to the services of an insurance broker vs agent or vice versa. In fact, there could very well be times in your life when you’ll need each one for different reasons. And it’s quite common for both individuals and businesses to toggle back and forth between the two as their insurance needs change.
The benefits of working with an insurance broker could be in your favor if:
- You’re too busy to shop around but aren’t sure which insurance providers can best meet your needs
- You have complex or evolving insurance needs and want to be sure you’re getting optimal coverage suited to your budget
On the other hand, working with an insurance agent could be right for you if:
- You know exactly which policy you want and don’t need guidance on other types of coverage
- You want to go with a particular insurance company but aren’t certain which of their plans offers the best coverage
Choose Williams & Case for Expert Insurance Guidance
For nearly 80 years, Williams & Case Insurance Agency has been helping individuals and businesses protect everything important to them. Our deep roots in Sebring, Ohio, keep us connected to our local community while we bring a world of options to the table for our clients.
All licensed insurance agents at Williams & Case can also function as brokers, which allows us to tailor policies and coverage to each client’s unique situation.
Whether you’re looking for affordable renters insurance, a farm insurance policy, special commercial insurance packages or something else, we’re ready to serve as your trusted insurance agent or broker. Contact us today to find peace of mind with our insurance experts.