Is it cheaper to buy insurance through a broker or direct?

It depends. Brokers can often find better rates by comparing multiple insurers, especially for complex coverage needs (home + auto bundles, high-risk drivers, commercial insurance). Direct insurers like Sonnet, belairdirect, and TD Insurance sometimes offer lower rates for straightforward coverage because they cut out the middleman. The best strategy is to get quotes from both.

How do insurance brokers get paid in Canada?

Insurance brokers earn a commission from the insurance company — not from you. Commission rates are typically 10–20% of your premium for new policies and 10–15% for renewals. You do not pay extra for using a broker. The commission is already built into the premium that the insurance company sets.

When should I use an insurance broker?

Use a broker when you need complex coverage (home + auto + umbrella), have a poor driving record or high-risk situation, own a business, need commercial insurance, or want expert claims advocacy. For simple auto or tenant insurance, buying direct may be cheaper and faster.

Insurance Broker vs Buying Direct in Canada

Broker vs Direct: Quick Comparison

Factor	Insurance Broker	Buying Direct
Number of insurers	10–30+ companies	1 company only
Price shopping	Broker does it for you	You compare quotes yourself
Cost to you	No direct fee (commission from insurer)	No direct fee
Price	Competitive — may find lower rate	Sometimes lower (no commission costs)
Advice	Personalized, licensed professional	Self-serve or call centre
Claims support	Broker advocates for you	Deal with insurer directly
Speed	Moderate — broker gathers quotes	Fast — online quotes in minutes
Complex coverage	Excellent — can bundle from multiple carriers	Limited to one carrier’s products
Availability	Business hours, some evenings	24/7 online

How Brokers Work

Step	What Happens
1	You contact a broker and describe your insurance needs
2	Broker assesses your risk profile and coverage requirements
3	Broker shops your policy across 10–30+ insurance companies
4	Broker presents the best options with their recommendation
5	You choose a policy; broker handles the paperwork
6	Broker reviews your coverage at renewal and re-shops if needed
7	If you have a claim, broker helps you navigate the process

How Brokers Get Paid

Payment Type	Source	Typical Amount	Who Pays
New policy commission	Insurance company	10–20% of premium	Insurer (not you)
Renewal commission	Insurance company	10–15% of premium	Insurer (not you)
Volume bonus	Insurance company	Varies	Insurer (not you)
Contingent profit sharing	Insurance company	Based on portfolio performance	Insurer (not you)
Fee for service (rare)	Client (commercial)	Disclosed up front	You

Key point: You do not pay brokers separately. Their commission is built into the premium that the insurer sets regardless of whether you go through a broker or buy direct.

Top Direct Insurance Companies in Canada

Company	Type	Best For	Available In
Sonnet (Economical)	Online direct	Quick online quotes, simple needs	ON, AB, QC
belairdirect (Intact)	Online direct	Auto + home bundles	ON, QC, NB, NS, PEI
TD Insurance	Direct / bank	TD banking customers	National
RBC Insurance	Direct / bank	RBC banking customers	National
Desjardins	Direct / coopérative	Quebec residents, members	QC, ON
The Personal	Group/affinity	Group rate eligible (employer, alumni)	National
ICBC (BC only)	Public insurer	Mandatory basic coverage	BC
MPI (MB only)	Public insurer	Mandatory basic coverage	MB
SGI (SK only)	Public insurer	Mandatory basic coverage	SK

When to Use a Broker

Situation	Why a Broker Helps
Bundling home + auto + umbrella	Can mix carriers for best price on each
Poor driving record (tickets, accidents)	Knows which insurers specialize in high-risk
New driver / young driver	Can find the most competitive rates for your age
Claims history issues	Knows which companies are more forgiving
Complex property (rental, cottage, condo)	Expert coverage advice
High-value home	Access to specialty insurers (Chubb, Aviva)
Small business / commercial	Commercial insurance requires specialized knowledge
Moving to a new province	Knows the local insurance landscape
Filing a claim	Advocates on your behalf with the insurer
Annual renewal review	Re-shops your policy automatically

When to Buy Direct

Situation	Why Direct Works
Simple auto insurance (clean record)	Fast, competitive online quotes
Basic tenant/renter’s insurance	Simple coverage, low cost
You want to compare yourself	Online tools make it easy
Group rate available (employer/alumni)	Group rates through direct carriers can be very low
You bank with TD, RBC, etc.	Loyalty discounts through bank’s insurance arm
Single product (auto only or home only)	No bundling needed

Cost Comparison Example

35-year-old driver, clean record, 2022 Toyota RAV4, suburban Ontario:

Channel	Quote 1	Quote 2	Quote 3	Best Rate
Broker (shopped 15 companies)	$1,650	$1,780	$1,850	$1,650
Sonnet (direct)	$1,720	—	—	$1,720
belairdirect (direct)	$1,690	—	—	$1,690
TD Insurance (direct)	$1,810	—	—	$1,810

Results vary. In some cases, direct is cheaper. The best approach is to get both broker and direct quotes.

Broker vs Direct: Claims Experience

Claim Stage	With a Broker	Buying Direct
Filing the claim	Broker helps you file, reviews details	You call the insurer’s claims line
Documentation	Broker advises what to provide	You follow insurer’s instructions
Estimate disputes	Broker negotiates on your behalf	You negotiate directly
Denied claim	Broker escalates with insurer contacts	You appeal through the insurer
Switching after claim	Broker shops new coverage for you	You start from scratch

How to Find a Good Broker

Step	Action
1	Ask friends, family, or your real estate agent for referrals
2	Verify the broker is licensed through your provincial regulator (RIBO in Ontario, AMF in Quebec)
3	Ask how many insurance companies they represent
4	Ask about their claims advocacy process
5	Compare the broker’s best quote against 2–3 direct quotes
6	Check Google reviews and complaints with the provincial regulator

The Best Approach: Use Both

Step	Action
1	Get quotes from 2–3 direct insurers (online, 15 minutes)
2	Contact a broker and ask them to beat your best direct quote
3	Compare coverage (not just price) — deductibles, limits, exclusions
4	Choose the option with the best value for your coverage needs
5	Re-shop every 1–2 years (or have your broker do it)