Article Contribution by Jacques
The insurance industry is a very complicated one and more than a little difficult to navigate. It’s full of terminology and concepts that you may not be familiar with if you’ve never had to think about insurance before. If you’ve been looking at the concept of becoming an insurance agent or broker, some of these terms and differences between agents and brokers may help you better determine which is right for you.
Insurance Agents are licensed professionals who work for one company, usually by the company making commission. A broker is an independent licensed professional who can represent multiple insurance companies. Brokers can offer you all of the products offered by the insurers they choose to work with. An independent Insurance broker simply serves as a matchmaker between consumers and insurance companies based on their insurance needs, budget and personality.
If you’re interested in getting your Ontario insurance license, you can work as an independent insurance agent or with an insurance broker. There are pros and cons to each of these paths that you should be aware of before making your final choice. Just remember, once you’ve decided what you need to do, the best thing to do next is earn your Ontario insurance license. You also can switch from being an insurance agent to a broker by taking an OTL Exam.
Exemptions from the OTL Exam
If you hold an insurance license from another province, you may also be exempted from the OTL exam but may be required to write a smaller auto insurance equivalency exam.
Federal and provincial government legislation requires individuals to write provincial exams as a condition of employment with any insurer providing basic automobile insurance coverage for private passenger vehicles. These exams are written as a requirement of licensure by the Ministry of Consumer and Business Services (MCBS) and Service Ontario. To write the exam, individuals must apply for and be granted certification from the Insurance Brokers Association (IBA). Certification is granted to those who provide proof that they hold a valid licence to practice insurance brokering in another Canadian jurisdiction or who pass the oral OTL exam administered by IBA staff.
What is the OTL? It is a closed book exam containing 100 multiple choice questions to be answered within the 2 hour time limit. Students need a 75% to pass and what makes it difficult is the questions are purposely written to avoid straight-up memorization.
You will need to know the definitions of standard terms and conditions used in the industry for home and auto insurance, such as: deductible; collision; fire; theft; liability; comprehensive; no-fault (personal injury protection); and salvage value (for your vehicle). The test will ask you to identify: if a person or company is at fault for an accident, when you must file a claim with your insurance, when it is mandatory to notify the claims department/office directly when filing a claim. There are sample questions that cover: state laws requiring auto insurance, policy requirements such as: deductible amounts that must be paid before an insurer will pay out, what levels of personal injury protection coverage must be met by insurance.
You want to find online resources that walk you through what you’ll need to know for the test. While no resource can provide you with Industry Specific Training, past exam questions are the next best thing.
The first step to becoming a licensed insurance agent is to register for the OTTB exam. All applicants are required to take this exam before submitting an application for licensing. The first step is registering. After registering, you’ll be notified of your exam date by email four weeks before the exam. From there, you have ample time to prepare and decide if this is something you can commit to before your exam date comes.
Becoming an insurance agent is no easy feat. The first step is actually deciding on your type of insurance you want to sell. Within each one there are different licenses you’ll need to apply for. Each state has their own requirements on how much education, experience, and finances are required.
According to the Insurance Information Institute, 26% of the auto insurance policies in Canada are written by Independent Agents and 42% of homeowners policies were written by Independent Agents. That means over half of all policies written will be done so by someone like you or me!
A lot of people have asked us, exactly what is required to become an insurance agent, so there we provided you the run-down on the licensing part. Beginning a new career can be both exciting and intimidating at the same time, but I’m here to help make it as painless as possible. As we mentioned earlier, the insurance industry is highly regulated. This means that if you’re going to start a new career in this sector, you’ll need to ensure that you meet each state’s requirements. We’ve gone over the licenses and certificates that you’ll need from your state, as well as offered some helpful tips for preparing for your exam. Now it’s time to study!
Jacques is an award-winning insurance professional who has worked in education since 2009 and in the insurance industry since 2013. In 2015 and 2019, he won an Insurance Council award for academic excellence after scoring 97% in his CAIB 3 exam and 96% in CAIB 4 (the highest marks in the province). He brings his study method, blended with his educational background and his ability to simplify complex ideas to students through these online courses.
Outside of his day job as an insurance broker, he lends his industry expertise to readers by writing for Insuranceopedia (a Canadian insurance publication) and Trusted Union among others. He’s also held educational webinars in front of hundreds of insurance professionals.