Let’s clear up some confusion and discuss the Insurance Broker Vs Agent topic. Along with who’s a better fit for you by breaking down their key differences. Most would assume that they are one in the same and perform the same tasks, so they never fully understand that when they are purchasing insurance who they are working with and what that person does.

What is an Insurance Agent?

An Insurance Agent is a professional (licensed or not) that acts as the arbitrator between the customer and the insurance company. There are two types of agents:

  • Exclusive/Captive Agents. This is an agent that works for just one insurance company and only sells policies for that particular provider. Captives cannot make recommendations outside their company, which isn’t always the best solution for the client.
  • Independent Agents. Whereas, these particular agents would for several different companies and offer multiple policies from several companies to help customers compare different plans, rates and policies. Independents can make recommendations based on what’s best for you, not the insurance companies.

An agent’s primary responsibility is to process forms in a timely manner and do so accurately. Most agents will want the customer to come in with an idea of the amount of coverage they are looking for to ensure that the policy that the agent provides meets that particular need. However, Compass Insurance Agency goes above and beyond the average agent to ensure that you receive all the coverage you need at a price that is tailored to you. Compass also will offer you advice on the coverage that best suits your needs to make you feel comforted by your decision.

The Difference Between Independent Agent And Broker

First of all, Insurance Brokers are NOT allowed in the state of Michigan! Unlike agents, brokers work through the insurance companies. Brokers are required to have a license in their approved state and have a higher liability. Meaning that if they do not meet their required standards they are liable to lose their license. Due to this most brokers will charge an administration fee for their services. A broker’s main responsibility they have is to analyze an insurance company to ensure that it has the right level of coverage. In order for an insurance broker to bind a coverage, they must obtain a legal document that temporarily serves as an insurance policy (or a binder). This is applied between 30-60 days and must be signed by a representative of the insurer.

Types of brokers:

  • Retail Insurance Brokers. These interact directly with policyholders and typically cover commercial policies.
  • Wholesale Insurance Brokers. They handle specialized coverages that are not available to other brokers and agents.
    • An example would be product liability insurance for a motorcycle manufacturer.


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Which is the Best Option to Choose?

Both Insurance Agents and Brokers have their pros and cons, so before deciding which one to choose take in the following into consideration:

Insurance Agent Features:

  • Are legal in the state of Michigan.
  • Have the ability to quickly check prices and coverages with dozens of various insurance companies to compare rates and conditions.
  • They offer a multitude of a customer’s insurance needs, not just a single type of insurance.
  • Understand the complexities of insurance and can advise a customer through each detail in a contract, so nothing is left hidden.
  • They are regulated on a state-by-state basis. Which helps define the policies and coverages that are state specific.
  • They understand that not all companies have the same coverage and policies, even those within the same state.

Insurance Broker Features:

  • Assess individual needs and obtain quotes by these needs alone. They may take photographs or conduct an inspection report (depending on the broker and the type of insurance).
  • They compare coverage from different insurers to get the best rates and conditions.
  • Provide advice and revisions at a policy renewal or mid-term if changes are necessary.
  • Ensures claims are handled fairly and quickly.

Michigan, Are You Interested In Working with an Independent Agent?

Compass Insurance Agency is the place for you. At Compass, we provide you with the best insurance coverage options and policies for the state of Michigan. Our independent agents work with you to tailor policies to all your insurance and budgeting needs. We also offer a live representative team that gets you quotes quick. For more information just click or call.