When looking for insurance, most people look to find a reputable insurance agent or broker. The terms broker and agent are often used without a true understanding of the difference between the two.  Both act as intermediaries between buyers and sellers of insurance, but the key difference is who each represents.  An insurance agent is a representative of the insurance company that employs them, and the agent sells and binds coverage with the insurer.  An insurance broker represents the buyer of insurance and is able to place insurance coverage with several different carriers depending on the broker’s relationship and/or affiliation with insurance companies looking to provide coverage and collect premium in a given area.

Which is better?  While it’s hard to generalize and say which is better, one thing to keep in mind is advocacy.  The agent that is an employee of the insurance company may not have the same ability to advocate for the policyholder at the same level that a broker can because the broker has the opportunity to change the insurer for the broker’s client.  The insurance agent will always only be able to place coverage with the insurance company employer.

Advocacy can be really important during certain types of transactions whether it be claims situations or follow-ups to property inspections or whatever. Sometimes insurance companies will look to change their exposure in a given geographic area.  In such cases, the agent will not be able to help the policies migrate to another insurance company.   On the other hand, an insurance broker move an entire book of business from one carrier to another when the market calls for it.

Hopefully, we have provided some insight as to the difference between an agent and a broker.  Whichever direction you choose, it’s always good to find a representative that you trust to handle your insurance needs professionally and properly.

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