Choosing an Independent Insurance Broker Over a Large Insurance Company

Planning for the future and protecting one’s assets are often at the forefront of a consumer’s mind when considering insurance options and whether or not to engage an independent insurance broker or work directly with a major financial institution or large insurance company. An ordinary consumer without specific training in the insurance industry may find it overwhelming that there are so insurance plans and features to select from. Many types of insurance you may need are required by law (e.g., auto insurance) or by a lender or they give personal protection to you and your family against financial loss.

Buying from Large Insurance Companies

A consumer may be drawn to a large insurance company in response to having insufficient knowledge of different insurance plans. Insurance divisions owned by large banks obtain high volumes of business from internal referrals and because a consumer finds it convenient to deal with one company for their financial needs, and there are multi-policy discounts to do so. Additionally, large insurance firms tend to have well established brand names as employers often choose their packages for extended health benefit plans. Yet, often, there are plans that better suit the needs of individuals that aren’t available through large insurance companies. Often it is when specific consumer needs cannot be met at a one stop shop that an independent broker is sought out.

Some consumers do not use independent brokers because of myths that they overpay for their insurance through a “middle-man” as a result. They may believe that they would pay less by going directly to the source to find the best insurance options because the commission paid to a broker is visible. In reality, the insurance plans from large insurance companies do not necessarily cost less for the features obtained. Consumers should be made aware that choosing the best insurance option can be complex and often the benefit of expert, unbiased advice could actually save money and offer peace of mind when committing to insurance premiums.

Benefits of Using an Independent Broker

There are many key benefits of using a broker instead of approaching a large insurance company yourself, including the benefit of independent advice, access to multiple insurance plans, after sales service, transparency, no added costs, and convenience, which are outlined further below:

  • Independent Advice

Insurance brokers or “special brokers” according to the Alberta Insurance Act, are licensed professionals regulated by the Insurance Brokers Association of Alberta (“IBAA”) that work for their client instead of an insurance company or bank. Since a broker is not affiliated with any company in particular, a client can ensure that any advice provided to them is honest, trustworthy and in their best interests.

  • Access to Multiple Insurance Plans

Numerous insurance packages from various insurance firms are available through independent insurance brokers. These independent professionals have knowledge of a wider range of insurers, insurance plans and packages throughout the country. Insurance brokers are therefore able to provide a more unbiased approach to determining the best options for their clients.

  • After Sales Service

Insurance brokers take the role of a personal advisor to ensure that their client receives the necessary information to make the best-informed insurance decisions, according to the Insurance Brokers Association of Canada (“IBAC”). As such, brokers not only provide expert advice about the insurance you select, the broker is also there to help you through the claims process and act as an advocate to ensure fair settlement.

  • Transparency

Unlike with the fees charged by an insurance company, a broker’s fees are transparent. The commissions for buying insurance are the same no matter what company the client decides to go with, so there is no added incentive for the broker to mislead client transactions.

  • No Added Cost

There is no added cost to you of using an independent insurance broker. A broker is paid a commission from the company that it settles its client’s services for.

  • Convenience

In the hustle and bustle of everyday life, it saves you time when a broker does the research and negotiating for you. Communication and meetings are flexible and decided between you and broker according to your needs and availability. There are no restrictions on how often or how little you are engaged in the process of finding optimal insurance solutions.

Additional informational for consumers about the benefits of retaining a licensed broker to aid in the process of choosing the best plan for one’s family is available from the Insurance Brokers Association of Canada and the Insurance Brokers Association of Alberta. In particular,
“A Consumer’s Guide to Property and Casualty (P&C) Insurance Transactions,” sets out basic principles of fair transactions that you can expect in working with an independent insurance broker.

Bringing You the Insurance You Need

At HDF Insurance in Edmonton, our independent brokers provide home insurance, auto insurance, business or commercial insurance, health insurance, travel insurance, and life insurance, including for associations. We provide you with peace of mind by enabling you to choose your insurance based on independent advice from a wider array of beneficial insurance options. Our insurance brokers are knowledgeable licenced agents and we focus on obtaining the right coverage for your needs. Our insurance brokers are knowledgeable licensed agents and we focus on obtaining the right coverage for your needs. Call us toll free at 1-800-567-2048.