When you purchase insurance, assuming this isn’t your first time around the block, you’ll likely be on the hunt for multiple quotes to compare between insurers so that you’re guaranteed to find the best price. And while it’s most certainly true that anyone can compare rates online, having a professional in your corner to help walk you through your options can be a great help.
Here’s why it’s essential to use an insurance broker when shopping for personal insurance online.
First of all, what is an insurance broker?
You might think: how hard is it to find insurance quotes? Imagine you were from the city of Calgary, AB, and you were on the hunt for auto insurance. You can simply input the query: “personal insurance quotes Calgary” into the search bar (or “car insurance Calgary”) and scroll through all the options that are presented to you. You fill out a couple questionnaires, get a few quotes, and you choose based on price. No biggie, right? Well, here’s the thing:
TLDR; an insurance broker is someone who essentially behaves as an intermediary between yourself and the insurance companies. They get to know you, your insurance history, and they’re armed with years of experience of working in the industry. Their job is to find you insurance that both suits your needs and comes at the lowest possible price.
No, they aren’t free. Brokers work on a fee, but the fee will still override the amount of savings you’d get from working with an insurance broker. Say, for an example, they saved you $100/year on a policy that you have for three years, and they charge you $100 for their services. That would still be $200 back in your pocket.
Do you need to use an insurance broker?
No, you don’t have to. Should you? In many scenarios, having an insurance broker in your corner is a bonafide way to save money, and if you have complicated needs, then it’s a no brainer. Consider the above scenario: if you were looking for a personal insurance company in Calgary, and you had multiple cars or homes, it could be a long and arduous process to purchase insurance on your lonesome. Moreover, it could be quite expensive if you didn’t know what to look for. Landlords and small business owners especially may have more complicated insurance needs. Here are reasons why having an insurance broker to help you can be of benefit:
- You don’t want to spend the time looking for quotes on your own
- You need to purchase insurance for a small business
- You want to have full, comprehensive knowledge of your policy, including limits/exclusions
- You have multiple properties
- You have multiple vehicles
- You want to work one-on-one with someone who knows you, your backgrounds, and understands your coverage needs
Note that with things like life insurance, you’re probably best off working directly with a broker and/or a financial advisor one-on-one.
How do brokers differ from underwriters and insurance agents?
Insurance brokers are easily confused for insurance underwriters. They both help you find insurance, get to know you, etc. but an underwriter will work with an insurance company to determine risk. Underwriters work only for a single insurance company and will help to determine whether or not a company should approve an applicant for a particular policy. They typically specialize in only one type of insurance (P&C, life, etc.) but both brokers and underwriters must be licensed.
Agents are similar to brokers. Insurance agents are also licensed (by the province) but they sell insurance only for a single company. As an example, if you call your bank to talk about insurance, they’ll hook you up with an agent who represents that company. Agents are highly knowledgeable and they are salaried. They have the ins on their company’s full range of products, but they can only sell you insurance from that single company. This means they can’t help you shop around.
The benefit of a broker is that they can get you personal insurance quotes in Calgary, or wherever you are, from multiple difference companies. Note: brokers work for you, but it’s not mandatory to work with a broker when trying to find insurance. Do your research, and choose wisely!