Choosing an Insurance Provider

By Michael C. Maclean, F.I.I.C., president of ICT Insurance Consulting & Training Inc., Toronto.

Before you purchase your insurance, consider whether you want to buy through a "direct" insurer, an agent, a broker, or a group plan.

What's the difference?

Agents and direct insurers represent one insurance company and offer only the products of that company. If that company has a range of products, then your needs will likely be met. It does, however, require that you have some knowledge of the products available in the marketplace, so you can compare.

A broker contracts with a limited number of insurance companies and can offer their various products, but generally, only the products of those companies with whom he or she has a contract.

A group plan may function either through an agent or a broker system. In some cases, while the plan may be serviced by a broker (and sometimes, just one broker provides access to the group plan), that broker may use one insurance company almost exclusively for that plan. In this sense, the broker is really functioning more as an agent than as a broker who is providing the products of a range of insurance companies. Group plans may be offered through work, alumni, or other group affiliations.

If continuity of supplier is important to you and you want to speak with the same agent or broker staff member each time you contact the insurance company, then this is something you will want to establish before you decide which system best suits your needs. A group plan may mean that you deal with a different staff person each time you contact the insurance company.