Whether you’re looking for insurance for a business or yourself, navigating all of the insurance jargon can start to feel overwhelming. With a variety of options available and insurance companies to choose from, it’s difficult to know for certain if your specific needs will be covered. In addition, depending on your personal situation or your business’s industry, you may have needs that aren’t obvious.
Thankfully, there are professionals working in the insurance industry that can help you determine exactly what your needs are, and what plans best suit those needs. However, here’s one more area where purchasing insurance may get confusing. Often mistaken and used interchangeably, you may not be sure whether you should speak with an insurance broker or an insurance agent.
While many people believe that what insurance brokers and insurance agents do are the same, they offer different services.
Insurance agents are whom most people are familiar with. An insurance agent can act on behalf of an individual or a group. Insurance agents are responsible for both representing and distributing an insurer and its products. Depending on whether they are a “captive agent” or an “independent agent”, insurance agents may offer products solely from one company or multiple.
Captive agents work for one insurance company on a contractual or full-time basis. They receive administrative support as well as leads from the company they’re employed with. While captive agents are very knowledgeable about their company’s insurance plans, they could be less aware of other products that exist on the broader market.
What’s more, their goal is to sell the insurance coverage they offer, which means they may not always be able to accommodate specialized insurance needs.
Independent agents offer a wider range of insurance coverage. Because independent agents don’t represent just one company, they’re often better equipped to provide insurance coverage more specifically tailored to a consumer's or business’ needs. At the end of the day, however, an independent agent’s duty remains with an insurer and not to clients, which means there are limits to the services they can provide.
While insurance agents represent insurers, insurance brokers represent clients and businesses. Throughout the entire course of insurance purchasing, an insurance broker works together with their clients to come up with the best possible insurance plan based on specific needs. Insurance brokers are under no obligation to sell one company’s insurance over another. This allows them to shop around the market for the best prices and plans.
Insurance brokers have a fiduciary duty to their clients. Therefore, when you team up with an insurance broker, you can expect to receive expert advice and guidance that prioritizes your specific needs. While insurance agents have a thorough understanding of their company’s plans and can explain them to you in great detail, the purchasing decision still falls onto the buyer. You will have to determine for yourself whether or not an insurance plan provides adequate coverage.
An insurance broker strives to find coverage tailored to your unique situation because they understand that insurance is not a “one size fits all” industry. In addition, insurance brokers have access to specialized insurers and are more capable of determining where gaps in your coverage might fall.
In short, an insurance broker can act as an invaluable business advisor whose services have your best interests in mind. An insurance agent, however, is aiming to make a sale.
If you or your business are looking to purchase insurance coverage, contact us at VillaNova Insurance Partners. Together, we’ll determine exactly what your needs are, and help you find a plan that ensures you're covered.