Both car insurance agents and car insurance brokers can help you to select and purchase your next auto insurance policy. As a result of this similarity, many people simply assume that agents and brokers are the same. The truth is that, while agents and brokers do share some similarities, there are also some very distinct differences between these two insurance professionals. Understanding these differences will allow you to choose the services that are best suited to your needs.
Car Insurance Agents
Car insurance agents typically have contracts with one or more insurance providers. These contracts authorize the agent to issue policies on behalf of the insurance company. While insurance agents do work with insurance companies, they are often independent contractors rather than traditional employees.
The downside to choosing a car insurance agent is that they will be limited to offering policies through the insurance providers that they are affiliated with. However, there are some advantages to this existing relationship as well. For instance, the fact that an insurance agent has a contract with the insurance company will allow you to quickly get a new policy issued without needing to reach out to the insurance company directly. This pre-existing relationship will also ensure that your car insurance agent is very familiar with all of the products and discounts that the company has to offer. This can help to ensure you get the most comprehensive policy possible while also paying as little as possible for this coverage.
Car Insurance Brokers
Car insurance brokers do not work with or for any particular insurance company. Instead, these brokers are freelance insurance professionals who often work with a wide variety of different insurance providers. Since brokers do not have existing contracts with any insurance companies, these individuals are not authorized to issue insurance policies. Instead, what these professionals do is help you evaluate your insurance needs, obtain competing quotes, and then do the legwork of getting your new policy issued by the insurance company that you have chosen.
The advantage of choosing an insurance broker over an agent is that these professionals have no loyalty or obligation to a particular insurance company. This means that they can focus solely on finding the insurance provider and policy that is best for you. On the flip side, choosing a broker means that you will need to go through a few extra steps in order to get your policy issued since they are not authorized to issue it themselves.
