While insurance agents, insurance brokers, and direct writers are all capable of helping you obtain the insurance policies you require, the services that each of these professionals provides can be quite different. In order to help ensure you are getting the right coverage, at the right price, you will first need to understand the role that each of these insurance professionals play so that you can ultimately choose the right venue for purchasing your new insurance policy.
Insurance Brokers
Insurance brokers work with many different insurance companies. However, these brokers are independent contractors and are therefore unable to start a new policy on behalf of any insurance company. Instead, these brokers will simply submit insurance applications on behalf of their clients and try to negotiate the best price for the coverage that their clients require.
Since insurance brokers are not employed by an insurance company, these insurance professionals are the ideal choice for people who need honest advice and guidance regarding what type of coverage is best suited to their needs.
Insurance Agents
There are two different types of insurance agents you can choose from, captive agents and independent agents. Captive agents work solely with one insurance company. This means that they not only endorse the products of a specific insurance company, but that the company they endorse has also provided them with the authority to start a new policy on their behalf.
Independent agents work with multiple insurance companies and may or may not have the ability to start new policies without the signature of a company representative.
The key difference between a broker and an agent is that while a broker represents the insured, an agent will represent the insurer. Consequently, the services of an insurance agent are best suited to individuals who already know exactly what type of coverage they wish to purchase rather than those who require assistance in determining the right level of coverage for their needs.
Direct Writers
Direct writers are different from brokers and agents in the fact that these insurance professionals not only help you to obtain an insurance policy, but they actually underwrite this policy themselves. Choosing to purchase a direct policy has many benefits, such as the ability to try and negotiate a lower price on all of your insurance policies. However, there are also some serious disadvantages to purchasing this type of policy. For instance, since a direct writer works only with the insurance products that they offer directly, your coverage options and available discounts may be significantly limited.