In Ontario, although there are countless choices when it comes to the company you choose to purchase your insurance from, you should know that you are essentially purchasing insurance from one of two sources. You’re either purchasing your insurance directly from an insurance company, or you’re buying your home and auto insurance from a registered insurance broker.
Let’s take a closer look at these options to uncover why and how to choose a broker, if that provides the lowest rate for you.
Buying directly from the insurance company
You may have heard the term “Direct Writer.” This is the term used when customers purchase their policies directly from the insurance company. In this case, insurance companies hire agents that represent them.
Insurance brokers can represent a number of insurance companies, and they earn revenue from commissions paid by each company. All brokerages in Ontario are staffed with insurance brokers that are licensed by RIBO (Registered Insurance Brokers of Ontario).
Is one cheaper than the other?
When it comes to car insurance in Ontario, whether you choose to purchase from a broker or directly from an insurance company, there is no general rule of one method being less expensive than another. The reason for this is that all insurance companies have filed rates with FSCO (Financial Services Commission of Ontario). Because rates are filed, this means that brokers do not have any control over the rates that have already been established.
However, brokerages have an inherent advantage over direct insurance companies: they can offer different, competing quotes, whereas direct insurance companies can only provide one. This becomes the customer’s advantage, making it important to know how to choose a broker wisely.
How to choose a broker
Choosing an insurance broker can be straightforward, but there’s a lot of choice on the market. Price is going to play the largest part in your decision, but you won’t always know your most accurate rate until you dig a little deeper with multiple brokerages.
Use this checklist to get started.
Do they hunt for discounts?
Discounts aren’t something that brokerages can apply whenever they feel like it because the prices they sell reflect carefully calculated financial risks on behalf of direct insurance companies.
However, the best brokerages will seek out all applicable discounts wherever possible, counselling you on how to save more money in the long run. These tactics include:
- Winter tire discounts.
- Bundling home and auto policies.
- Claims-free discounts for home policies.
- Driver training discounts.
- Driving convictions past the insurance consideration date.
- Multi-vehicle auto policy discounts.
- Renewal discounts.
- Smaller commuting distances.
Not all of those are guaranteed from all insurers, and many discounts reflect changes that unfold over time (such as lower exposure to roadside risk, annual renewal bonuses, and good driving records). But knowing how to choose a broker for your insurance policies starts with shortlisting the ones who work in your best interest to find you the lowest rates available.
Can you get a quote online?
Many insurance companies and brokerages still require you to dial a number, wait on hold for 20 minutes, talk to a rep reading from a script, and then walk away with a feeling like you still don’t have all the answers.
And sometimes you can only call after business hours because you work for a living and can’t take personal time between 9am and 5pm. Choosing an online broker means that the company has some sort of solution to get a quote when it’s convenient for you, not just the brokerage.
Read Google reviews
Choosing an online broker will likely start with reading reviews of the brokerages you’re researching. The reviews won’t give you accurate quotes, of course, but they will certainly give you an idea of how the company treats its customers.
Also be aware that people tend to post reviews more often when they’re angry than when they’re happy, so it’s not uncommon to see a disproportionate amount of angry reviews. But you should keep an eye out for places with a large amount of positive reviews in particular, because it shows that the brokerage has gone above and beyond the normal standards to deliver. This is important in learning how to choose a broker.
Do they offer claims counselling?
Claims counselling may be available from direct insurers as well, but we’re willing to bet that you don’t feel comfortable telling your direct insurance provider about a fender bender if you’re just going to pay out of pocket anyway.
This is where claims counselling comes in. Choosing an insurance broker means trusting a company to work in your interest and telling you your options when it really matters.
Brokerages should always provide the option to chat over the phone, but they should also have a quick, painless, and accurate way to get an online quote where applicable discounts happen automatically.
Can’t hop on the phone right now? Get your 3-minute quote here to see your rates on your schedule.