Insurance Agent vs. Broker: What’s the Difference?

The comparison of an insurance agent vs. broker comes down to a few main differences, including who they work for and the companies they work with. Insurance agents represent only the companies they are contracted to work for. Insurance brokers, on the other hand, represent ordinary consumers and don't have a particular company they work for. Both insurance agents and insurance brokers work on commission.

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Rachael Brennan has been working in the insurance industry since 2006 when she began working as a licensed insurance representative for 21st Century Insurance, during which time she earned her Property and Casualty license in all 50 states. After several years she expanded her insurance expertise, earning her license in Health and AD&D insurance as well. She has worked for small health in...

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Benjamin Carr was a licensed insurance agent in Georgia and has two years' experience in life, health, property and casualty coverage. He has worked with State Farm and other risk management firms. He is also a strategic writer and editor with a background in branding, marketing, and quality assurance. He has been in military newsrooms — literally on the frontline of journalism.

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Reviewed by Benji Carr
Former Licensed Life Insurance Agent

UPDATED: Jan 13, 2022

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Quick Facts

  • An insurance agent represents insurers while brokers represent buyers
  • Brokers can provide quotes from many different insurance companies
  • Both insurance agents and brokers are required to have business insurance

When it comes to buying term life insurance, car insurance, or any other type of insurance, you’ll hear the terms “agent” and “broker” thrown around a lot. You might not know exactly what they do or how they differ from each other. Though, the insurance agent vs. broker topic isn’t all too difficult to understand.

The difference between an agent and a broker is pretty simple: an agent sells one type of insurance product for one company, while a broker can sell many different types of products for many different companies.

Agents work on commission, while brokers are paid by their clients instead of the insurance company.

How do I find an insurance broker near me? Is an agent or a broker the right choice for me? We have answers. This article will give you all the information about the insurance agent vs. broker subject and settle the matter once and for all.

Before you read more about the difference between an insurance agent and a broker, make sure to enter your ZIP code below to fast, free quotes from top companies.

What is an insurance agent?

An insurance agent is someone who represents a particular insurance company and sells that company’s products. They usually work on commission, meaning they get paid based on the policies they sell.

Agents are licensed to sell only the products of the companies they represent. So, if you go to an agent asking for car insurance, they can only sell you car insurance from their company and probably at a higher price than you would find elsewhere.

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What is an insurance broker?

An insurance broker is someone who represents multiple insurance companies and can sell you products from any of them. They don’t work on commission, so they aren’t motivated to push one product over another.

Brokers are paid by their clients instead of the insurance company and are free to shop around for whatever policy would be most advantageous for their clients.

What are the benefits of working with an insurance agent?

The benefits of working with an insurance agent are pretty clear:

  • Agents are knowledgeable about the products they sell and can help you choose the right amount of coverage.
  • They’re licensed to represent a particular company, so they likely have experience with claims and know how that company handles them.

If you’re leaning on picking a particular insurance company, siding with an agent may be your best best.

What are the benefits of working with an insurance broker?

The benefits of working with an insurance broker are also pretty clear:

  • Brokers have access to many different products from multiple companies, so they can find the best policy for you.
  • They’re not motivated by commission, so they’ll look for the permanent life insurance policy, car insurance, or home insurance that’s best for you rather than the one that pays them the most.
  • Brokers are paid by their clients, so you don’t have to worry about them steering you towards a more expensive policy.

If you’re open to shopping for multiple insurance policies, hiring an insurance broker is your best option.

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What are the drawbacks of hiring an insurance agent?

The drawbacks of hiring an insurance agent are pretty clear as well:

  • Agents work on commission, so they’ll be more interested in selling you a policy and making their money than what’s best for you.
  • They may even recommend products based purely on how much commission it will earn them instead of its value to your family.

Insurance agents are opportunistic in nature. It’s important to know this going in.

What are the drawbacks of hiring an insurance broker?

The drawbacks of hiring an insurance broker can also be pretty obvious:

  • Brokers shop around for multiple companies and don’t have access to all their resources like agents do. This can lead to a longer process of finding the right policy as well as the potential for mistakes.
  • Since they’re not commissioned, brokers may not be as motivated to find you the best deal possible. They might settle for a policy that’s okay instead of one that’s great.

Insurance brokers may not have the same resources as insurance agents. Some of them may not perform their due-diligence in working for your best interest either.

How qualified are insurance agents?

Insurance agents are required to have a license in order to sell insurance products.

In most states, this means passing an exam that tests your knowledge of insurance law and product types.

This can be a good thing if you’re looking for someone who knows the law and insurance products well.

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How qualified are insurance brokers?

Because brokers represent many different insurers rather than just one at a time, they must have additional education before becoming licensed to work with clients.

Usually, this takes the form of coursework called continuing education classes that keep them up-to-date on changes within each insurer’s policy offerings and product prices. In some states,

Insurance brokers don’t need to have a license in order to sell insurance policies.

However, they must complete mandatory training courses on the different types of products offered by each company they work with. This ensures that they know enough about each type of policy to make an informed recommendation.

How does customer support differ between agents and brokers?

Customer support is where the real difference between insurance agents and brokers really shows.

When you work with an agent, you’re typically working with one person who’s responsible for your account. If something goes wrong or you have a question, they’re your only source of help.

If you have a problem with your policy, your agent may need to get in touch with the underwriter, the person who actually writes and approves policies, which can take time.

Brokers, on the other hand, have access to multiple customer service representatives from different companies. This means that if there’s a problem with your policy, someone will be able to help resolve it quickly without having to go through extensive channels.

Insurance Agent vs. Broker: The Final Verdict

Ultimately, choosing between an insurance agent or broker is a personal choice. It will depend on your particular situation and your exposure in the insurance industry.

Insurance agents are more geared toward people who are experienced in the industry and have a good idea of the company they want to buy from. Brokers are ideal for newcomers in the industry that want to assess all of their options.

Before meeting with either an insurance broker or an agent, you can compare insurance rates online easily. Just enter your ZIP code to see free insurance quotes from top companies right now.

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