Everyone's insurance needs vary. With so many ways to buy insurance, it can be challenging to understand what you should buy and from whom. Direct insurers, brokers, and agents can all provide you with insurance, but there are critical differences among the three:
- Purchasing insurance directly through an insurer: Buying insurance from an insurer over the phone or on a website is called purchasing from a direct insurer or a direct writer. This option typically doesn't include an intermediary like an agent or broker. Instead, they sell their policies directly to the public through other channels like call centres and websites. When you choose to purchase from a direct insurer, you only have access to the insurance coverage options and pricing offered by that particular company. This applies both at your initial purchase and renewal, so your choices may be limited regarding negotiating or changing your coverage. While purchasing online or over the phone can be convenient, getting the answers can be challenging if you have questions, especially when making a claim.
- Purchasing insurance through an independent agent: Like a direct insurance provider, an agent only offers products and services from one insurance company. This business model appoints independent agents to sell insurance products on the company's behalf exclusively. An agent will have expertise in the insurer's offerings, but they do not work directly for the company. Instead, they are contracted and paid commissions based on the volume of policies they sell. They can assist with any changes to your policy and provide additional insurance advice. However, they can still only offer rates for products supplied by the contracted company.
- Purchasing insurance through a licensed insurance broker: A broker is a licensed insurance professional who works independently of a specific insurer or company; brokers must maintain their credentials through regular licencing exams to keep in good standing. Unlike agents or direct insurers, brokers can access products from several insurance companies to find the best coverage options for your specific needs. A broker focuses on understanding your needs and finding the right products to create a customized insurance solution. As their client, a broker will shop around for you at each renewal to ensure your rates and policy remain competitive. When you use a broker, they represent you, not the insurer, and advocate on your behalf.
When buying insurance, asking questions and thoroughly understanding your policy is essential to securing the proper coverage. We're here to help. Our experienced team of insurance brokers will help you to mitigate risk with coverage that works for you.
