Insurance Broker Vs. Insurance Agent

Insurance Broker Vs. Insurance Agent

Written by Caitlin Wood
Last Updated May 7, 2021

No matter what type of insurance product you plan to take out, you’ll need an insurance company to provide it to you. There are a handful of ways to go about finding the right policy and insurer. The route you take should provide you with a policy that provides you with adequate coverage and comes with premiums that you can comfortably afford.

Check out what happens if you miss a life insurance payment

A couple of avenues you can take to secure an insurance policy is to work with an insurance agent or broker. While the terms “agent” and “broker” may often be used interchangeably, they have key differences. In this article, we’ll help you determine which one may be better for you when it comes time to take out an insurance policy.

Check out how Sun Life financial advisors help Canadians meet their goals and plan for their future.

What Is An Insurance Agent?

Unlike an insurance broker, an insurance agent works for an insurance company and sells the agency’s products to consumers. They earn commissions off every insurance policy they sell for the company. 

Insurance agents help consumers choose the appropriate policy to purchase. However, since they represent the insurance company, an insurance agent ultimately looks out for the best interests of the company they work for.  

Two types of insurance agents exist:

  • Captive agents. These insurance agents usually only represent one insurance company.
  • Independent agents. These agents represent multiple insurance companies.

Both types of agents are paid by commission and can complete an insurance transaction.

Lookout How To Tell If Your Insurance Agent Is Misleading You

Loans Canada Lookout


What Is An Insurance Broker?

An insurance broker serves as a middleman between consumers and insurance companies. They will search for the best insurance policies that best suit the needs of the clients they serve. 

A broker will gather as much information from you as they can to make sure the insurance company and the policy closely match your needs. They’ll go over things like your budget, the different types of coverage, terms, conditions, and premiums. Ultimately, the broker will recommend a specific insurance policy that stands out as the clear winner.

An insurance broker does not work for one particular agency. Instead, they work for you and have your best interests in mind. Once a policy has been decided upon, you will be redirected to the insurance provider to finalize the contract.

Check out the 14 terms you should know when buying insurance.

Overview Of Insurance Agents vs. Insurance Brokers

Insurance AgentInsurance Broker
Who they representThe insurance company they work forMultiple insurance companies
Number of companiesCaptive agents: one insurer
Independent agent: multiple insurers
Any company within their network
TypesCaptive and independentRetail or wholesale
ExpertiseThey may or may not have the expertise required to recommend the best suitable policiesHave qualifications needed to recommend the best suitable policies to clients they serve
GoalTo help make their insurance agency a profit while helping consumersTo help ensure the consumer gets the best policy with the best rates and terms

How Do Insurance Agents And Insurance Brokers Differ?

There are a few key differences between insurance agents and brokers:

  • Insurance agents represent the insurance companies they work for, while brokers represent consumers.
  • Insurance agents are only able to provide quotes for policies that their agency offers, while brokers can introduce consumers to policies from multiple insurers.
  • Insurance agents can finalize insurance policies and complete coverage contracts, while brokers can’t.
  • Insurance brokers typically have specific qualifications to ensure they have the expertise needed to provide the best service and find the ideal policies for their clients, while agents don’t necessarily have such expertise. 

Check out the most undervalued form of insurance.

Benefits And Drawbacks Of An Insurance Agent


  • No middleman. By working with an insurance agent, you can work directly with a company without the need for a middleman. This can help you obtain a quote much faster since you won’t be going through a long list of policy comparisons. In turn, you can save a lot of time. 
  • Work with the same agency for all insurance products. You may be interested in taking out more than one type of insurance policy. In this case, it may be better for you to stick with the agent who represents your current insurer to get all the policies you need to stay protected.


  • May not get the best price. Since you’re limited to one insurer, you won’t be able to compare policies. As such, you might not get the best price compared to other insurance providers.  

Check out how life insurance can protect your family from your debts.

Benefits and Drawbacks of an Insurance Broker


  • No charge to you. Insurance brokers are free to work with. Instead of the bill going to you, the insurance company that you ultimately sign on with will pay the broker a commission. 
  • Your best interests are looked after. Since an insurance broker doesn’t work with any particular insurance agency, they look out for your best interests to find you the best policy with the lowest rates. 
  • Expert advice. No matter what kinds of questions you may have about insurance policies, your insurance broker will have the answer. 
  • Access to many insurance companies. Insurance brokers work independently, so they can introduce you to a myriad of insurance companies rather than just one. 
  • Access to many insurance policies. Not all insurance agencies will have what you need. With a broker, you can find the best policies that suit your needs. 


  • Sales pressure. Since brokers work on commission, they are under pressure to make sales. Some consumers may find this off-putting. 
  • Need to form a new working relationship. If you already work with an insurance company for an insurance product, you might not want to have to deal with a party you’ve never worked with before and may rather stick with your insurance agent. 

Should You Work With an Insurance Broker or Insurance Agent?

There are perks and drawbacks to working with each one. To help you determine who to pick, there are a few considerations to make. 

For instance, do you want all your insurance products with one insurer? Do you already have an insurance agency that you’re happy with and want to stick with them to take out a new type of policy? Then perhaps an insurance agent may work best.

On the other hand, do you want to find the best price on a policy, regardless of the insurance provider? Do you want the peace of mind knowing that the expert assisting you is not affiliated with one agency and has your best interests in mind? Do you want someone to do the comparison shopping for you? Then an insurance broker may be the route to take.

Find out why buying insurance online may be cheaper.

Final Thoughts

Not only do you want to find an insurance policy that offers you the right type of coverage, but you also want a policy that comes with premiums that fit within your budget. You have plenty of options when it comes to finding a policy, including working with an insurance agent affiliated with a specific insurance provider or dealing with a broker who will do the legwork to find the best policy for you. Be sure to weigh the pros and cons of each type of professional before deciding who to work with. 

Caitlin Wood is the Editor-in-Chief at Loans Canada and specializes in personal finance. She is a graduate of Dawson College and Concordia University and has been working in the personal finance industry for over eight years. Caitlin has covered various subjects such as debt, credit, and loans. Her work has been published on Zoocasa, GoDaddy, and deBanked. She believes that education and knowledge are the two most important factors in the creation of healthy financial habits. She also believes that openly discussing money and credit, and the responsibilities that come with them can lead to better decisions and a greater sense of financial security.

Click on the star to rate it!

How useful was this post?

Research & Compare

Canada's Loan Comparison Platform

Largest Lender Network In Canada

Save time and money with Loans Canada. Research and compare lenders before you apply. Share your experiences with Canada's top lenders.

Save With Loans Canada

Special Offers

Red American Express® Card

Red American Express® Card
Ends April 30, 2023

Earn up to 12,000 bonus Scene+™ points in your first year (that’s up to $120 towards travel).

View Offer
Cashback & Bonus Offer

Cashback & Bonus Offer
Ends March 1st, 2023

New Offer! Get up to $2,000 cashback + a $50 bonus on signing up. Conditions apply.

View Offer
Earn 5% Cash Back With Neo

Earn 5% Cash Back With Neo
No annual fee!

Earn an average 5%¹ cash back at thousands of partners and at least 0.5%² cashback guaranteed.

View Offer
Make No Payments Until 2023

Make No Payments Until 2023
Ends Soon

Borrow up to $50,000 from our partner, Fairstone, and don’t pay until 2023*

View Offer
Best Personal Loan Provider by Greedy Rates

Confidential & risk-free

All consultations and conversations with Loans Canada and its partners are confidential and risk-free. Speak with a trusted specialist today and see how we can help you achieve your financial goals faster. Loans Canada and its partners will never ask you for an upfront fee, deposit or insurance payments on a loan. Loans Canada is not a mortgage broker and does not arrange mortgage loans or any other type of financial service.

When you apply for a Loans Canada service, our website simply refers your request to qualified third party providers who can assist you with your search. Loans Canada may receive compensation from the offers shown on its website.

Only provide your information to trusted sources and be aware of online phishing scams and the risks associated with them, including identity theft and financial loss. Nothing on this website constitutes professional and/or financial advice.

Your data is protected and your connection is encrypted.

Loans Canada Services Are 100% Free. Disclaimer

Build Credit For Just $10/Month

With KOHO's prepaid card you can build a better credit score for just $10/month.