When someone talks about insurance policies, an insurance agent and broker is something that can commonly be heard. Have you ever thought about an Insurance agent vs Broker? Well, both of these terms are often used interchangeably, however, there is some difference between the two. If you are up for an insurance transaction, you must know the difference between these two terms.
There are many more terms when it comes to insurance. For example, the answer to the common question, “What are insurance points?” Is something you should know with confidence. These are the points that are added to your driving record by the department of motor vehicles of your state.
The DMV adds any violations or at-fault accidents to your driving record behavior and when you apply for any insurance, the company checks out your DMV record to know the number of insurance points you are having and this impacts your premium rates for insurance.
For those looking for an Insurance agent Vs Broker, an insurance agent works as a salesperson for any insurance company. While a broker offers the consumers more generalized insurance services concerning any insurance agents or underwriters. This is the most common difference between the two.
Let us move ahead and find out the difference between an insurance agent and an insurance broker.
Insurance Agent vs Broker: Comparison Table
It is necessary to check out the comparison table of the difference between an insurance agent and an insurance broker. So, let us have a look at the comparison table of the insurance agents and the brokers to better understand insurance agent vs broker.
|They are appointed by the insurance companies themselves.
|They are selected by the buyers after choosing carefully from a pool of available brokers.
|They only represent a single insurance company or a specific company and work for that.
|They represent multiple insurance companies for prospective insurance buyers.
|Recommendations are biased towards the company they are representing.
|Recommendations are in the buyer’s favor as they are working for the consumers only.
|As they are having an entity to back upon, hence the back office support is better in this case.
|Better quality support as highly personalized service is offered by them.
|Their main motive is to make a profit. They usually work on selling those products of the company that can help them to earn the highest profit from an individual customer.
|The broker doesn’t get any additional thing for any specific range of products offered by him.
|It has two types: Captive and independent agents.
|It has two types: Wholesale and retail brokers.
As we have done a comparison between the insurance agents and insurance brokers and understood the basics of the difference between an Insurance agent vs broker, let us further check out the types of insurance brokers and types of insurance agents.
Types of Insurance Brokers
There are two types of insurance brokers. Retail brokers and wholesale brokers are the two types of insurance brokers. Let us have a look at what they both mean.
1. Retail Broker
The retail brokers are the ones who work closely with the clients. They work to find the right and apt insurance for their clients and purchase that directly either from wholesale brokers or from an insurance company. They usually work with general and less complex policies of insurance covering common risks.
2. Wholesale Broker
Wholesale brokers are known to sell more specialized insurance products. They sell such products to retail brokers as well as insurance agents. They don’t have to work with the clients to understand their requirements and needs.
Let us now check out the types of insurance agents for a better understanding of Insurance agent vs broker.
Types of Insurance Agents
There are more than one type of insurance agent. The primary two types of insurance agents are captive agents and independent agents. So, let us have a look at their meanings.
1. Captive Agents
The captive agents are the ones who work only for a single company that can either be full-time or work as an independent contractors. They receive administrative staff and office support from the company that hires them. They are highly knowledgeable about the products they represent and are offered by the insurer as they only sell these products.
2. Independent Agents
The independent agents work with several insurers and they are not just tied to a single company. They often offer a huge range of insurance products. They are pretty similar to insurance brokers.
As we have got to know the types of insurance agents and insurance brokers, let us move ahead and find out more related to the insurance agent vs broker.
Insurance Agent vs Broker: The Difference Between the Two
Let us have a look at the difference between an insurance agent and an insurance broker to better understand the insurance agent vs broker.
Insurance agents only represent a single company and sell the products in the lineup of the company. Brokers sell products that belong to different companies in the market. They don’t have any allegiance to a specific company and sell products as per the requirements of the customers.
2. Products Offered
The insurance agents offer you the products and services that are available in their employer companies and also for the flawless processing of various documents such as premium payments, paperwork, and forms. On the other hand, insurance brokers provide you with information regarding the suitable options as per your requirements.
There is a narrow scope in the case of insurance agents as compared to the insurance brokers as the insurance agents only work with specific companies or just a single company. However, a wider scope might be considered in the case of insurance brokers as they have broader access to the full insurance marketplace because they are not just limited to a single company.
The insurance company is accountable for the actions of the agent while it is not so in the case of insurance brokers. Brokers have higher accountability because they aren’t backed by any insurance company. The insurance company is penalized for the insurance agent’s wrongdoings while it is not the same in the case of insurance brokers.
The insurance agents sell policies directly to the consumers on the behalf of their insurance companies while it is not the same in the case of insurance brokers. An insurance broker acts as a liaison between the consumers and insurers, underwriters, or agents with loyalty towards everyone.
This is the common difference between insurance agents and brokers. This is all about the insurance agent vs broker.
This is all about an insurance agent vs broker. The most common difference between the two is that an insurance agent works for a specific company while this is not so in the case of a broker. An insurance broker works by considering an individual consumer’s needs. If you have to choose between an insurance agent vs broker, you can choose one as per your requirement. Take the above points into consideration and then decide the best one that you require!