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

Updated October 2026

When shopping for car, home or business insurance in Ontario, you have several options.

You can purchase insurance through an independent insurance broker, deal with an insurance agent or buy coverage directly from an insurance company.

Although these options may appear similar, there are important differences in how they operate, which insurance companies they can offer and the services they provide.

Understanding these differences can help you decide which approach is right for you.

At L.D. Dermody Insurance Brokers, we believe consumers should understand not only what insurance they are purchasing, but also the role of the professional helping them arrange it.

1. What Is an Insurance Broker?

An insurance broker is a licensed insurance professional who helps clients obtain insurance coverage from the insurance companies with which the brokerage has agreements.

Unlike an agent who represents a particular insurance company, an independent insurance broker generally has access to products from multiple insurers.

This allows the broker to compare available options and recommend coverage based on the client's circumstances.

A broker's responsibilities can include:

Assessing a client's insurance needs.
Explaining available coverage options.
Obtaining quotations from insurance companies.
Comparing premiums, deductibles and policy features.
Helping arrange new policies and renewals.
Assisting with changes to existing coverage.
Helping clients navigate the claims process.
Providing ongoing insurance advice.

An insurance broker also has professional and regulatory obligations to clients.

In Ontario, general insurance brokers are regulated by the Registered Insurance Brokers of Ontario (RIBO).

2. What Is an Insurance Agent?

An insurance agent is an insurance professional who sells or arranges insurance on behalf of an insurance company.

In Ontario, general insurance agents are regulated by the Financial Services Regulatory Authority of Ontario (FSRA).

Some agents work with one insurance company and offer that company's products.

Other distribution arrangements may differ, so it is worth asking which insurers an agent is authorized to represent.

Insurance agents can provide valuable product knowledge, advice and service.

However, an agent whose role is limited to one insurance company generally cannot compare that company's products with policies from competing insurers in the same way an independent broker with multiple insurer relationships can.

This distinction is particularly important when premiums increase or a customer's insurance needs change.

3. What Is the Main Difference?

The central difference is the relationship with insurance companies and the range of products available.

An independent insurance broker generally works with several insurance companies and can help clients consider coverage from those insurers.

An insurance agent typically acts on behalf of the insurance company or companies the agent is authorized to represent.

Here is a simplified comparison:

Insurance Broker	Insurance Agent
Generally has access to several insurance companies	Often represents one insurance company
Can compare products from insurers represented by the brokerage	Offers products from the insurer or insurers represented
Regulated by RIBO for general insurance in Ontario	Regulated by FSRA for general insurance in Ontario
Can assist with policy changes, renewals and claims	Can also assist with policy changes, renewals and claims
May be able to move a client to another represented insurer	Options depend on the agent's insurer relationships

Both brokers and agents can provide professional service. The important distinction is understanding the range of options available and whom the professional represents.

4. Can an Insurance Broker Compare Several Insurance Companies?

Yes, provided the brokerage has access to those insurers and their products.

For example, if you are looking for automobile insurance, your broker may obtain quotations from several insurance companies.

Those quotations can vary because each insurer has its own approved rating rules, underwriting requirements, discounts and coverage options.

One insurance company may offer a competitive premium for a particular driver, while another may be better suited to a different household.

The same applies to home and business insurance.

However, not every insurance broker represents every insurance company.

Some insurers distribute their products directly or through exclusive arrangements.

A broker can compare the options available through the brokerage, but cannot guarantee access to every product in the market.

5. Does Using an Insurance Broker Cost More?

This is one of the most common questions consumers ask.

In many cases, an insurance broker is compensated through commissions paid by the insurance company.

The commission is generally included in the insurer's pricing structure rather than appearing as a separate charge to the customer.

However, compensation arrangements can vary.

Some brokerages may charge service fees or receive other forms of compensation, depending on the product and circumstances.

Any applicable fees should be disclosed in accordance with regulatory requirements.

Using a broker does not automatically mean your insurance will cost more, but it does not guarantee the lowest premium either.

Insurance pricing depends on factors such as the insurer, coverage selected, risk characteristics, claims history and applicable discounts.

When comparing quotations, it is important to look beyond the price.

A less expensive policy may have different deductibles, coverage limits or exclusions.

6. Why Can Insurance Quotes Differ Between Companies?

Insurance companies do not all evaluate risks in exactly the same way.

For automobile insurance, premiums can vary based on factors such as:

Driving history.
Years of driving experience.
Vehicle type.
Location.
Annual kilometres driven.
Coverage and deductible selections.
Applicable discounts.

For homeowners insurance, insurers may consider:

Location and construction.
Age and condition of the building.
Roof, plumbing and electrical systems.
Rebuilding cost.
Previous losses.
Water damage exposure.
Heating systems.
Coverage options and deductibles.

Business insurance can involve even more variation because different insurers specialize in different industries and types of risk.

A broker can help explain why quotations differ and whether a lower premium involves changes to the coverage.

7. Is the Cheapest Insurance Policy Always the Best Choice?

Not necessarily.

Price is important, but it should not be the only consideration.

Two policies with similar premiums may provide different levels of protection.

For example, one homeowners policy may offer broader water damage coverage than another.

An automobile policy may have different optional endorsements or deductibles.

A business policy may contain exclusions or limitations that are particularly important for the customer's operations.

A good insurance comparison should consider:

What is covered.
What is excluded.
Coverage limits.
Deductibles.
Optional endorsements.
Claims settlement provisions.
The customer's individual needs.

An insurance broker can help identify these differences so clients can make informed decisions.

For more information, see our article Customize Your Car Insurance: Finding the Right Coverage for Your Needs.

8. What Happens if Your Insurance Premium Increases?

Insurance premiums can change for many reasons.

Some increases are related to the customer's individual circumstances, while others reflect broader changes in claims costs, repair expenses, severe weather losses and insurer pricing.

If you deal directly with an insurer or an agent representing one company, your available options through that relationship may be limited to that insurer's products.

An independent insurance broker may be able to review coverage and obtain quotations from other insurance companies represented by the brokerage.

However, moving to another insurer is not always the best solution.

A new policy may have different coverage, underwriting requirements or eligibility conditions.

In some situations, remaining with the existing insurer may be preferable.

A broker can help review the available options rather than focusing solely on the renewal premium.

For more information, see our article Why Did My Car Insurance Go Up? — 7 Common Reasons (and What You Can Do About It).

9. Can an Insurance Broker Help When You Have a Claim?

Yes.

One of the important services an insurance broker can provide is assistance when a client experiences a loss.

For example, following a house fire, water damage claim or automobile accident, a broker may help by:

Explaining the general claims reporting process.
Helping the client contact the appropriate claims department.
Reviewing relevant policy wording.
Clarifying information requested by the insurer.
Following up on outstanding claims questions.
Raising concerns when a client believes something has been misunderstood.
Helping the client understand the insurer's explanation of a coverage decision.

The insurance company is responsible for investigating, adjusting and settling claims under its policies.

A broker does not have authority to guarantee that a claim will be approved or to override the insurer's coverage decision.

However, an experienced broker can help clients communicate with the insurance company and understand the process.

This can be especially valuable when a claim involves complicated policy wording or a disagreement about coverage.

10. Does an Insurance Broker Work for the Client or the Insurance Company?

An independent insurance broker acts as an insurance intermediary and has professional duties to clients, including obligations concerning advice, disclosure and fair dealing.

At the same time, the broker operates under contractual arrangements with the insurance companies whose products the brokerage offers.

This means a broker must work within the authority granted by the insurer and cannot independently change policy terms or promise coverage that the insurer has not agreed to provide.

In Ontario, RIBO establishes professional standards and regulatory requirements for licensed general insurance brokers.

These obligations help protect consumers and support appropriate professional conduct.

The value of a broker relationship lies in providing informed advice, explaining options and helping clients deal with insurance companies throughout the life of their policies.

11. What Happens When Your Insurance Needs Change?

Insurance needs rarely remain the same forever.

You might:

Purchase a new home.
Replace your vehicle.
Add a newly licensed driver.
Start a home-based business.
Purchase a cottage.
Renovate your property.
Rent out part of your home.
Retire or change how frequently you drive.

These changes can affect insurance coverage, eligibility and premiums.

A broker who understands your circumstances can help identify when your policies should be reviewed.

However, your broker can only act on changes that are brought to their attention or otherwise become known.

It is important to notify your insurance broker whenever there is a significant change to your property, vehicles, business or how they are used.

For more information, see our article When Things Change, Let Your Insurance Broker Know.

12. What About Buying Insurance Directly Online?

Online insurance purchasing has become increasingly common.

For some consumers, particularly those with straightforward insurance needs, obtaining a quotation or purchasing a policy online may be convenient.

However, online quotations depend on the accuracy and completeness of the information entered.

A quotation may also be subject to further underwriting review.

It can be difficult for consumers to identify important differences between policies when comparing only the quoted premium.

For example, a home insurance quotation may not make the limitations of certain water damage coverages immediately obvious.

Similarly, a business owner may not recognize an exclusion that is particularly relevant to their operations.

Whether purchasing online, through an agent or through a broker, consumers should understand what coverage they are buying and disclose all relevant information accurately.

13. How Are Insurance Brokers and Agents Regulated in Ontario?

Ontario has different regulatory frameworks for general insurance brokers and agents.

Registered Insurance Brokers of Ontario (RIBO)

RIBO regulates general insurance brokers in Ontario.

Its responsibilities include broker registration, professional standards, continuing education and regulatory oversight.

Financial Services Regulatory Authority of Ontario (FSRA)

FSRA regulates general insurance agents and insurance companies in Ontario, among other financial services sectors.

Consumers can use the relevant regulator's public resources to learn more about licensing and regulatory requirements.

Both regulatory systems are intended to support consumer protection and appropriate conduct within the insurance marketplace.

14. What Should You Ask Before Choosing an Insurance Professional?

Whether you are speaking with a broker or an agent, consider asking:

Which insurance companies can you offer?
How do you determine which coverage is appropriate for me?
What are the important exclusions and limitations?
Are there optional coverages I should consider?
How are you compensated?
Are there any additional fees?
Who should I contact if I need to make a claim?
Will you help me review my coverage at renewal?
What should I do when my circumstances change?

The answers can help you understand the service you will receive and the range of insurance options available.

15. Why Choose an Independent Insurance Broker?

Insurance can be complicated.

Policies contain conditions, exclusions, definitions and endorsements that are not always easy to understand.

An independent insurance broker can help clients navigate those details and make informed decisions.

The benefits may include:

Choice

Access to products from multiple insurance companies represented by the brokerage.

Professional Advice

Assistance understanding coverage options, deductibles and policy limitations.

Ongoing Service

Help with renewals, policy changes and questions as circumstances change.

Claims Assistance

Support communicating with the insurance company and understanding the claims process.

An Established Relationship

The opportunity to work with someone familiar with your insurance needs over time.

These services can be particularly valuable when insurance needs become more complicated.

The Value of Working With L.D. Dermody Insurance Brokers

At L.D. Dermody Insurance Brokers, we believe insurance should involve more than simply finding a price.

Our role is to help clients understand their coverage, review available insurance options and make informed decisions about protecting their homes, vehicles, businesses and other important assets.

We work with the insurance companies represented by our brokerage to help find coverage suited to each client's circumstances.

We also recognize that insurance needs change over time.

Whether you are purchasing a new policy, reviewing an existing one or dealing with a claim, our office is available to assist.

If you have questions about your insurance or would like to discuss your coverage options, contact L.D. Dermody Insurance Brokers. We would be pleased to help.

This article provides general information about insurance brokers, agents and insurance regulation in Ontario as of October 2026. Products, services, compensation arrangements and insurer relationships vary. Insurance coverage is subject to the terms, conditions, limitations and exclusions of the applicable policy.