There are very few things in life that you can only do one way; this sentiment rings particularly true when it comes to buying insurance. Some Canadians like to work directly with insurance companies while others prefer to chat over the phone with agents.
If you've tried these methods and are still having a hard time finding quotes that meet your needs or budget, then you should reach out to your local insurance broker.
Is this your first time buying insurance? If so, you're likely asking yourself questions like, "what is an insurance broker?" or "why use a broker for insurance in Canada?".
We're glad that you asked.
This article will go over what a broker is, what they do, why you should use one, and answer some commonly asked questions.
What is an insurance broker?
Simply put, a broker (also referred to as an insurance advisor) is an experienced expert that represents the policyholder throughout the insurance-buying process.
Brokers utilize your personal information and their insurance industry knowledge to find competitive quotes. Experienced brokers can also help fine-tune your insurance knowledge by answering questions and outlining crucial details within your policy.
It's important to note that brokers don't offer their services for free; we'll discuss pricing and fees later on.
Why use insurance brokers while looking for quotes in Canada?
Now that you know what a broker is, it's time to answer the question you've all been waiting for: why use an insurance broker in Canada?
Firstly, insurance brokers have your best interest in mind and don't have any hidden sales agendas. Unlike insurance agents, who only offer coverage from a single company, brokers work with a wide variety of carriers. Because of this, brokers have a larger repertoire of options, making it easier for them to find quotes that meet (or exceed) your expectations.
Additionally, brokers have a vast knowledge of the insurance industry; your broker has likely worked with someone that was in the exact same situation as you. A seasoned broker will know what discounts you're eligible for — some of which you may not have even considered!
With all of this in mind, you can see why more Canadians are choosing insurance brokers.
Who should use an insurance broker?
The following types of policyholders can benefit from having an insurance broker by their side:
- Policyholders with more than one home or car
- Policyholders that want to learn more about their coverage
- Business owners
- Canadians buying their first insurance policy
- Canadians that want to shop around for a new policy
- Policyholders that value consistency and professional relationship-building
Commonly asked questions about insurance brokers in Canada
At Surex, we receive countless questions about insurance brokers (this shouldn't come as a surprise). By this point, we've heard them all — so, we feel like it's the perfect time to answer some of the questions that we get asked the most.
How do you contact an insurance broker?
Easy! You can contact our insurance brokers over the phone or on the internet. If you're short on time, we suggest using the web. After answering a short questionnaire on our website, you'll receive ten of the most competitive quotes on the market. This process usually takes ten minutes or less.
What's the difference between an insurance agent and a broker?
We've used the term insurance agent a handful of times in this article — but what is an insurance agent, and how are they different from brokers?
The term "agent" is occasionally used interchangeably with "broker" by first-time policyholders who aren't familiar with insurance lingo yet. However, policyholders should know that there is a clear difference between the two roles.
Insurance agent — An insurance salesperson that works for a single carrier. Agents represent the carrier during the insurance-buying process.
Insurance broker — An insurance expert that works with numerous carriers. Brokers represent the policyholder during the insurance-buying process.
Simply put, agents want to make money for the insurance company, whereas brokers want to get you the most bang for your buck (without sacrificing the quality of the coverage).
We want to make it very clear that insurance agents aren't trying to take advantage of policyholders — they simply have a different set of goals.
How much does it cost to use an insurance broker in Canada?
Unfortunately, there's no black-and-white answer to this question. Each situation is different, making it impossible to pinpoint a precise answer.
But, we can say that there are two primary expenses that you can expect: broker fees and commission fees.
Broker fees
Broker fees are general expenses that the policyholder needs to cover. The following factors heavily influence the price of your broker's fees:
- Size of the insurance policy
- The complexity level of the insurance policy
- Type of insurance policy
For instance, if you hired a broker to help you bundle your home and auto insurance policies, you'll likely have to pay a more significant fee than someone who only bought auto insurance.
Policyholders should know that these broker fees are generally non-refundable. So, if you terminate your policy, you won't be reimbursed by the broker. Policyholders should keep this in mind before committing to a decision.
Commission fees
Fees aren’t the only source of income for insurance brokers. Some brokers receive a commission for placing you with a provider. The size of this commission often ranges from 12.5% to 20%; however, it depends on the type of insurance that you purchase.
Insurance companies add the cost of the commission to your premium. Thankfully, the savings that you receive greatly outweigh the expenses.
Will you use an insurance broker next time you're re-shopping your policy?
Insurance brokers are here to help — not only can they guide you throughout the insurance-buying process, but they can help you save a sizeable chunk of change along the way. If you're still not convinced, don't hesitate to reach out to one of our advisors. We’re always happy to prove why we’re considered one of Canada’s top insurance brokerages.
