What's the difference between an insurance broker and an agent?

The short answer

The difference is who each one acts for. A broker is retained by the client and compares the market on their behalf. An agent is appointed by an insurer and offers that insurer's policies.

How does the distinction work in practice?

A broker holds contracts with several insurers, so one conversation produces options from more than one company. An agent holds a contract with one, so the comparison a client would otherwise get has to be assembled by approaching several agents separately.

At renewal the difference shows again. A broker can move a client between insurers without the client re-applying from scratch, because the broker already holds the market relationships.

Ontario licenses the two differently. Brokers are registered with the Registered Insurance Brokers of Ontario, which sets the licensing, education and complaint-handling rules that apply to them.

What does this mean when arranging coverage in Ontario?

It decides how many markets are compared and who is available afterwards. A brokerage is paid by commission from the insurer that ultimately writes the policy, which is disclosed rather than hidden.

Sutherland Insurance publishes its broker compensation disclosure, which sets out the commission range each insurer pays.

Nothing on this page is a recommendation about which route suits a particular buyer.

Related questions

• What is an insurance deductible?
• How fast can I get insurance in Ontario?