What’s the difference between an insurance agent and an insurance broker we’re gonna talk about their fine differences and dive into whether or not you should choose one of the two today what’s up you’re watching tito talks non-life insurance discussions once again
With your favorite tito miguel who loves to make non-life insurance discussions easier to understand for both agents and clients thank you so much for dropping by to this special episode of tita talks where we’re going to to be talking about two terms that get thrown around quite often um when it comes to discussions about insurance and these two terms are insurance agents
And insurance brokers now while you may hear these two terms you used in the same sentence most of the time it’s very important to note that these and let me say this out right now these are two different things that’s right you cannot use them interchangeably an insurance agent is completely different from an insurance broker although they do have some similarities
First and foremost agents and brokers are both considered as intermediaries from the eyes of the insurance company and when we say the term intermediary these are people groups of people organizations businesses that actually connect the insurance company to its target market which is the insuring public any any person or group of people outside the insurance company that gets
This job done is considered an intermediary which means not just insurance agents and insurance brokers are intermediary sometimes car dealerships are considered intermediaries because when people buy new cars they get insurance at the same time so in a way dealers also operate as intermediaries so it’s a large umbrella
That houses both agents and brokers not only that both agents and brokers also earn on a commission basis meaning if the client decides to get insurance whether it’s through a broker with the help of an agent or via directly to an agent then either the agent or the broker receive a commission for their efforts for closing the deal and both of them are standard practice
Already in the insurance industry however that is where their similarities end it’s time to talk about their differences what sets them apart let’s start with one of the biggest differences then shall we [Music] the biggest difference between an agent and a broker are the parties that they represent and actually this is pretty much
Straightforward this is because in an insurance contract you only have two parties that would be the insured and the insurer agents and brokers represent one of each agents represent the insurer meaning the insurance company brokers on the other hand represent the insured the consumer once insurance agents or consumers are part of the deal
The transaction passes through other parties and additional services and additional benefits are obtained by the customer through the through the participation of agents and brokers to be more specific agents on the other hand can look for clients directly agents don’t have to go through um they don’t have to go through any other parties and they can
Contact and sell insurance directly to their clientele now on the other hand brokers don’t actually look for clients to sell they actually look for insurance policies to give to their already standing clientele so brokers already have a group of people which they represent these could be direct individuals who subscribe or who get services from a brokerage
These could be companies that actually depend or have trust in the services and the expertise of the broker and what the broker does is the broker scours the market for insurance deals to be able to offer to their clients so i hope the difference really stands out right now insurance agents scour the market for clients brokers scour the market for insurance
Deals with that being said we go on to the types of things that they do and it’s very very important that you uh that you understand what types of expertise these people bring in insurance agents and insurance brokers should both be capable of understanding and explaining insurance to the clientele
A minimum or basic understanding of knowledge is necessary for both positions whether an agent or a broker it’s just that your area of expertise shall differ on very very small scales take note brokers are there in service of direct indirect service of their clients meaning the brokers don’t just scour for good insurance deals for their clients brokers also take a good look at their clients and assess their risks
They provide computations and analysis and consultations for their clients so that their clients know they’re getting very accurate very useful very relevant advice from the bookers as to what type of insurance they could get brokers can answer a lot of issues potential clients what type of insurance would you would would the business need do they simply insure their computers
Under the property policy or do they also get electronic equipment insurance along with interruption of business coverage as well these sorts of things are answered by the broker because they take a good look at the business at the client and make recommendations sorry i move my mic and they make recommendations based on what they see insurance agents on the other hand
Directly provide insurance policies to their clients which they have met on a first-time basis yes you could also provide analysis and you could also provide consultations and advice to your clientele but the fact that you’re coming that you’re representing an insurance company may not be a welcome idea to the customer
Whether or not you’re whether or not you’re really neutral in the sense that you’re not after a commission or that you’re not represent you’re not for the benefit of the insurance company fact remains you do represent an insurance company and sometimes customers better appreciate it if they consult with brokers first before they get their insurance policy i’m not saying agents
Are bad though because agents play a very important role even for brokers [Music] that important role extends onto who can close insurance deals now this is a very very fine difference between the two of them and it’s best that you keep this in mind insurance agents can sell insurance on their own insurance
Brokers cannot once a broker has scoured the the market for deals for their client and the client has already chosen a deal or a policy or a product that they’re interested in buying the broker still has to complete the transaction by directly communicating with the insurance agent or directly with the insurance company therefore the the broker cannot close the deal on
Their own they simply they still have to approach the insurance company on the other hand agents can close deals on their own even if it’s just them and the prospect talking once the prospect has made up their mind or once the agent has convinced the prospect to buy insurance then the agent can already print out a policy for them or get a policy sent out to the client and have the premiums paid for which
Means it is possible for agents and brokers to work together this is because agents can provide the policies that brokers will need once their clients have agreed to a specific product to which they’re already interested in a way it’s best not to think as agents and brokers as competitors in the same market
Yes they’re both dealing in insurance however they’re fishing in different ponds this is because again agents look for clients brokers look for insurance deals [Music] i hope you enjoyed that lesson as much as i like showing it to you or sharing it with you let’s go with our question of the day
For this coming friday this is a little bit interesting though and it’s another general insurance industry question is it my voice is cracking is it is it possible for you to change anything about an insurance policy after it has been it has been paid for let me repeat that one more time is it possible to make adjustments amendments to an insurance policy once
It’s been paid for and it’s already operational let me know what you feel let me know what you think in the comment section and if you find this type of content relevant and useful to you please subscribe consider subscribing to our channel help us grow help us reach more people thank you so much for attending today once again this is your favorite tito miguel always saying I hope you enjoy the rest of your day