This article has been updated from a previous version.
Luckily, the situation is not as complicated as it seems. There are really only two means of purchasing insurance: through a direct-to-consumer insurance company or through an independent broker.
A direct-to-consumer insurance company, such as Allstate or TD Insurance, can offer you only their own company’s products. A broker, meanwhile, works for a third-party brokerage and acts as a middleman between you and multiple insurance companies, which allows them to offer you a wider range of products from a number of providers.
Neither a direct-to-consumer insurance company nor broker is consistently cheaper than the other, but they do have meaningful differences. Here are a few things to consider before you make your pick.
What are the advantages of working with a broker?
The main benefit is choice. A broker can compare different providers’ plans and rates and offer you the best unbiased option — whether that’s the cheapest plan or the product perfectly tailored to your unique needs.
Brokers can also find you discounts that you might not discover on your own — for example, you can save on auto insurance if you use winter tires or insure multiple vehicles on the same policy.
Brokers tend to be one-stop shops. You’ll often be dealing with the same person to find every kind of insurance you need, which can be more convenient than dealing with a handful of different providers. They can also offer advice on when it makes sense to file a claim with your insurance company, and when it might be cheaper in the long run to pay out of pocket. If you do file a claim, they’ll deal with the insurance company on your behalf, potentially saving you time and stress.
What are the advantages of working with a direct-to-consumer insurance company?
Many large direct-to-consumer insurance companies offer round-the-clock access to their agents, which makes it easy to get insurance outside working hours. In some cases, you can get a quote and sign up for coverage entirely online. This is often a quick and easy option for straightforward kinds of coverage like tenant insurance.
And because agents work for direct-to-consumer insurance companies, they're experts on the company-specific products that they can offer you.
Whether you go with a direct-to-consumer insurance company or a broker is ultimately a personal choice. Fortunately, we work with both. So when you use LowestRates.ca to compare rates, you can still find the best prices no matter which one you choose.