Brokers vs. Direct Agents: Key Differences in Choosing Insurance

Exploring The Functions Of Independent Agents & Brokers In Insurance

Are you looking for the perfect type of insurance at the best possible price? Friends or family may recommend their independent insurance agent or an insurance broker, but, what is the difference between both of them?

In this article we’ll explore both of them to help you choose the best option according to your needs.

What Are Independent Insurance Agents?

An independent insurance agent is a local insurance professional who gets to know you and your needs before offering you the right coverages. They are not tied to any insurance provider: they act as a sort of personal shopper and offer multiple choices so you get to decide the option that works the best for your case, as well as different types of insurance. In case you need many insurance policies, this is the best option as they can make the process easier and faster, saving time and money.

So Then What’s An Insurance Broker?

Insurance brokers sell and sometimes negotiate all types of insurance services, like property, casualty, specialty and health insurances, both for individuals and companies. They discuss customer’s needs and provide multiple insurance options. Brokers can also sell policies for many companies that are partnered with, but they usually represent the buyers and not the insurance companies. Some brokerage firms can let you compare quotes from various companies.

Independent Insurance Agents vs. Brokers: Key Differences You Need To Know

Independent agents can write insurance policies, but brokers can’t. Brokers can gather information and submit applications on your behalf. This is comfortable, but does not make the process faster or easier. During this period, brokers acquire temporary policies that will become a full-grown policy after 30 or 60 days.

While independent agents have contracts, brokers don’t. Independent agents have trusted connections they’ve built with multiple insurers, and give their customers a great deal of insight into each company’s background, but brokers can search options at any company but they won’t have the extra insight to tell you in great detail about each company’s specialties.

Both independent agents and brokers are licensed, highly educated professionals who specialize in providing their customers with the insurance that’s best for them. Brokers specialize in “everything”, but agents specialize in “niches.” Brokers are often used in situations where finding coverage might be tricky, like international mega-trillion dollar companies that deal with hazardous waste. Independent agents specialize in almost everything else. This is great when it comes to simplifying the process of looking for life insurance, boat insurance, homeowners insurance and more all together.

Which Is More Affordable? An Insurance Broker Or An Independent Agent?

A broker will usually set their own fees, or have extra admin fees, making it more expensive. Life insurance agents or brokers usually earn a base salary to which commissions are added. Some work only on commission and it will depend on some factors such as the type of policy they sell and the payment structure.

Agents and brokers are both required by law to disclose all of this before your purchase, so you’ll know this before signing up for anything.

Should I Use a Broker Or An Independent Agent?

This will depend on your personal needs and preferences. In case you are looking for Nevada business insurance for a large number of employees, a broker will be most likely to be the best option. If you are looking for a life or homeowners insurance, an independent agent is probably the best option, as they can begin the process and help you to negotiate the right options for you.

Choosing The Right Insurance Professional For Your Needs

Now that you know the differences between brokers and direct agents, you get to choose which one is the most convenient for your case. If you need to protect your property or your family, you may want to choose an independent agent. Some people shop insurance companies or get in touch with brokers to get the best possible mix of everything. At PJO Insurance Brokerage, a top-rated insurance brokerage in Nevada, we offer insurance solutions from the view of the client, understanding their concerns, researching what their insurance needs are, and creating an insurance plan that will fit their particular needs. Contact us today for a tailor-made plan that meets your specific needs.