When it comes to safeguarding your precious assets, there are two paths you can take to get insured. The first is the direct route, where you connect with an insurance company yourself to arrange coverage. The second is enlisting the services of an insurance broker, who’ll scout the market to find you the best possible coverage. Broker vs direct insurance – which is the better option for you? Read on to discover the distinctions between the two and choose the best fit for your needs.


Broker vs direct insurance – what’s the difference?

An insurance provider is a company that sells their own insurance products to customers. They are the ones you will pay your insurance premiums to and who will pay you in the event that you make a successful claim. Direct insurance can be obtained if you approach an insurance provider and sign on to an insurance policy with them.

An insurance broker is an agent who works on your behalf to understand your insurance risk and to find the most suitable cover. They are insurance industry professionals who may receive payment through a commission from the insurance provider that you choose or through fees. Insurance brokers also help you through every step of the insurance process, working to give you the best outcome.


Pros and cons of using an insurance broker


  • Insurance brokers work on your behalf. As your agent, it is their mission to make sure that you get the best outcome from every area of your insurance experience. That includes finding out your insurance needs, sourcing the best policies, explaining the terms of your policies, liaising with the providers and advocating for you at claim time.
  • Insurance brokers are insurance experts. They have training and industry expertise to make sure that you get the right coverage for your specific needs, get answers to difficult questions and make sure that your claims have the best chance of success.
  • You can build a strong working relationship with an insurance broker. Since the broker is your insurance agent they will get to know you and your needs and preferences and you will get to know them. This working relationship will make communication easier as time goes on.
  • Insurance brokers can save you money. Brokers are able to use their industry connections to source insurance from different providers in the insurance market making sure you get the best price for the right coverage.
  • Flexibility. Insurance brokers can put together packages and customise insurance for your specific needs, especially when the broker has expertise in your industry.


  • Some brokers charge an upfront fee for their services.
  • Some brokers receive a commission from the insurance provider of the policies that you end up choosing. This may not affect the cost of your insurance as the broker can receive their commission out of the provider’s normal premiums or the broker may even be able to negotiate for you a lower cost than you could get for yourself.
  • Some brokers are better than others. You would do well to find a broker who has more knowledge about your industry and is well regarded.

Pros and cons of using a direct insurance provider


  • You can get coverage very quickly. You could sign up to a policy in a few minutes and have your coverage begin right away in some cases.
  • Simplicity. If your insurance needs are low, straight-forward, generic and don’t change much then it is simple to get coverage directly without going through an agent.
  • Do it yourself. If you like to manage your own insurance and enjoy reading through the fine-print of different policies, crunching the numbers and comparing them, then going directly with insurers gives you the chance to personally manage all the details.


  • The insurance provider has their own interest which does not always align with yours. Your interest is to get precisely the right cover for the lowest possible price and receive fair payments when you make a claim. Your interest is also to fully understand the insurance that you are covered with and to have a smooth and easy process of communication and making claims.
  • You may not have a strong working relationship with an insurer. You could talk to a different person every time that you give them a call and have to explain everything again.
  • Sales representatives from insurance providers may not know much about insurance in general or be able to understand your risk and insurance needs precisely.
  • Insurance providers may only have a limited range of generic insurance products. These might not fit your needs well but that’s all that they can give you.
  • It can take a very long time to compare a large range of policies and find out which is right for you.

Broker vs direct insurance – which is right for you?

At the end of the day, there are some instances where it makes more sense to go with either one. This choice depends on a variety of factors.

When an insurance broker makes more sense

  • When your needs are more unique or complex. As your insurance needs become more complex it makes more sense to have an insurance broker use their expertise to guide you to the right choice.
  • When you are insuring things of greater value. When you are investing more money into your insurance to protect things of high value it makes more sense to have a broker find the right policies for you. In this case you will really want to make sure you get your insurance right.
  • When you value the advocacy and business relationship that a broker provides. If you want an industry insider and expert to be on your side during claims and every other stage of the insurance process, then a broker is for you.

When a direct insurer might make more sense

  • You are insuring things of low value or low importance. In such cases if you make a mistake then the consequences might not be too severe for you.
  • You prefer to manage your own insurance. If you have a preference for doing it yourself then that’s totally fine. If this is the route you are taking then just make sure you do your homework well before signing on to an insurance product.

Looking for an insurance broker in Perth?

After learning about broker vs direct insurance, if you have decided to take advantage of the benefits of a broker to protect what is important to you, whether business insurance or personal, contact us at GSK Insurance Brokers. We’ve been insurance brokers in Perth for over 40 years and are committed to providing our clients with deep specialist knowledge, excellent service and tailored solutions all in the clients best interest.

January 28, 2023

By Graham Knight

Founder and Managing Director of GSK Insurance (established in 1981). Graham draws upon more than 50 years’ experience in the insurance industry, working in both insurance and broking across various private, public and government sectors in Australia.

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