Our comparison below is based on sources that define how agents and brokers are regulated and what each owes you. On the broker side, we drew on the Registered Insurance Brokers Act, 1981 and RIBO’s Code of Conduct. On the agent side, we reviewed FSRA’s licensing framework for how agents are authorized and supervised in Ontario. We also considered the CCIR/CISRO Fair Treatment of Customers guidance, the closest thing to a national standard for conduct at the point of sale.
Keep reading to find out the differences between insurance agents and brokers, see the pros and cons, and find out which one fits you more.
Insurance Agent vs Broker: Which One Should You Choose?
The better option always depends on how much help and guidance you need. If you’re already set on using a certain insurer, an agent might suit your needs better. Conversely, a broker is better when you don’t know which company to buy insurance from.
Before you make a decision, look at how “standard” your profile is. In our Ontario quote data, drivers with an at-fault accident average $4,178 per year, compared with $2,132 for drivers with clean records. If you are a young, inexperienced, or high-risk driver, a broker’s ability to shop several markets is especially important to you.
Who Is an Insurance Agent?
An insurance agent is a licensed professional who sells insurance policies on behalf of one or more insurance companies. They usually know all about that particular company’s insurance offerings and can answer all your questions about them. Agents can also give you insurance bundles, like a home and auto bundle, to help you save money.
Insurance agents may be employees of an insurance company or independent contractors authorized to sell that insurer’s policies. They’re part of the staff, so they may be able to access special offers or discounts brokers can’t get.
Do you need an insurance agent to buy insurance? An agent isn’t required, but they can be a big help. They can close an insurance deal on their own, making policies faster and easier to get.
Types of Insurance Agents
There are two types of insurance agents you may find:
- Captive agents: Captive agents are the “traditional” insurance agents. They work for a single insurance company. Captive agents get various perks from their employer, like office space, referrals, and client leads. They only sell their employer’s insurance products in return for these benefits. They might not offer a lot of policies, but they’re extremely knowledgeable about the ones they sell.
- Independent agents: Independent agents work for multiple companies, usually as contractors. This means they can offer more insurance products than captive agents. They’re quite similar to brokers, but independent agents still represent the companies they work for. Contrast this with brokers who represent their customers’ best interests.
Pros and Cons of Working With Insurance Agents
Choosing whether to work with agents or brokers means you need to know their pros and cons. Here are the benefits and advantages of working with insurance agents:
What Is an Insurance Broker?
An insurance broker is a licensed professional who helps you get insurance but isn’t tied to any insurer. They’re independent insurance experts who compare products from the insurers they represent and recommend the best options that suit you. Brokers typically represent clients and help them find policies that best meet their needs.
Insurance brokers work with you to identify what you need from a policy. They don’t have to sell policies from any particular company, so they can find an insurance policy that can satisfy your needs. This freedom to pick and choose policies from different companies gives brokers an edge over insurance agents.
Types of Insurance Brokers
There are two types of insurance brokers:
- Retail brokers: As an individual customer, you’ll mostly work with retail brokers. They sell policies covering common risks and hazards like auto and home insurance. Retail brokers usually get policies directly from insurers or a wholesale broker.
- Wholesale brokers: These brokers sell more specialized policies to insurance agents and retail brokers. As a customer, you likely won’t interact with many wholesale brokers.
Pros and Cons of Working With Insurance Brokers
Thinking about working with an insurance broker? Here’s a list of pros and cons:
How Agents and Brokers Are Licensed in Canada
The clearest difference between agents and brokers is about who holds their licence. In Ontario, insurance agents are licensed by the Financial Services Regulatory Authority of Ontario (FSRA), while brokers are licensed by the Registered Insurance Brokers of Ontario (RIBO), a self-regulatory body created by the Registered Insurance Brokers Act, 1981. Both routes involve qualifying exams, continuing education, and conduct rules, but they answer to different regulators with different complaint processes.
Outside Ontario, agents and brokers are licensed by the same provincial insurance council in most cases. The Alberta Insurance Council and the Insurance Council of British Columbia, for example, license agents and brokers under one umbrella. In Quebec, the Autorité des marchés financiers does the job. Across the board, Canada’s regulators have adopted joint fair-treatment-of-customers guidance (CCIR/CISRO), which is the closest thing to a national standard for how you should be treated at the point of sale.
How to Verify a Broker or Agent
Before you hand over your driving record and personal details, spend a minute confirming the person is actually licensed. It’s free:
- Ontario brokers: search RIBO’s public licensee directory to confirm the individual and their brokerage both hold an active licence.
- Ontario agents: use FSRA’s online licence search, which covers insurance agents and adjusters.
- Everywhere else: check the provincial insurance council’s registry, or the AMF’s register in Quebec.
- Look past “active”: RIBO publishes its disciplinary decisions, so you can also see whether a broker has a conduct history — years licensed plus a clean record tells you a lot.
What to Ask When Shopping for Insurance
Agents and brokers’ basic objective is to answer your questions about insurance as much as they can to clarify what you need to know. But, first, you need to know what to ask. Here are example questions you can ask insurance agents and brokers:
Questions to Ask Insurance Agents
- Can you explain the claims process to me?
- How long does an insurance claim usually take?
- Will I work with the same agent to manage my policy?
- Can you alter insurance coverage to meet my needs?
- Are you a captive or an independent agent — whose products can you actually offer me?
Questions to Ask Insurance Brokers
- How much experience do you have in the insurance industry?
- How do you select the best policies for me?
- Which insurers do you recommend?
- Which insurers do you represent, and how many of them did you actually quote for me?
- How are you paid on this policy — and do you receive volume or profitability bonuses from any of the insurers you’re recommending?
Need more information from your insurance broker? Read our article on questions to ask your insurance broker.