Reader’s Question:

Can you tell me the differences between an auto insurance broker and an agent? Which one should I preferably approach?

Janus

Anchorage AK

An auto insurance broker is different from an auto insurance agent in many ways. In the U.S., the magnitude of differences, however, differs from state to state.

Basically, an auto insurance agent represents an insurance broker and writes an insurance policy for you, the client. On the other hand, a broker simply writes an insurance policy on your behalf. This means that a broker can have many agents working for him. Most often, they have their own auto insurance business. Since an auto insurance broker has more and heavier responsibilities than the agent in terms of insurance, brokers are more highly regulated.

An auto insurance agent may also represent more than one insurance company. Thus, he has a wide range of different auto insurance policies that he can sort through to determine which ones will really fit your concerns, lifestyle and budget. He can even search for you the best auto insurance coverage at the lowest possible price from among the insurance companies he represents. This will also mean that your understanding and knowledge of the insurance company where you will be signing your policy will generally be through your agent and when the time comes that you make claims against your insurance policy, your insurance agent will process the claims for you.

On the other hand, since an auto insurance broker represents an insurance company, and owns it in most cases, you will have a better feel of what the company is all about, what it stands for, its mission and vision, and how it sees its client. Although focused only with the auto insurance policies his company offers, he can make adjustments and changes to better suit your needs. Talking to a broker will give you the chance to determine whether the insurance company will be there and will take care of you after, or even before, accident happens.

Choosing which ones to approach between an auto insurance agent and broker depends actually on what you really want. Do you want convenience? Do you want to be well-informed? Or do you just want to have the basic auto insurance available to you? Whoever you’ll be talking with, make sure you read and understand the terms and conditions and the fine prints in your auto insurance policy before affixing your signature in it.