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Auto Insurance Brokers: Should You Use One?
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Written by
Anna Baluch
Insurance Writer
Anna Baluch is a Cleveland-based personal finance and insurance expert. With an MBA from Roosevelt University, she enjoys writing educational content that helps people make smart financial decisions. Her work can be seen across the internet on many publications, including Freedom Debt Relief, Credit Karma, RateGenius, and the Balance. Connect with Anna on LinkedIn.
Edited by
Jackie Cohen
Editorial Manager
Jackie Cohen is an editorial manager at Insurify specializing in property & casualty insurance educational content. She has years of experience analyzing insurance trends and helping consumers better understand their insurance coverage to make informed decisions about their finances.Jackie's work has been cited in USA Today, The Balance, and The Washington Times.
Reviewed by
Amber Benka
Licensed Insurance Agent
Amber Benka is a licensed insurance agent specializing in auto, home, commercial, life, and health insurance.
Updated August 15, 2022
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It can be difficult to find the perfect car insurance policy. You have to research car insurance companies, choose the type of coverage you need, and compare all your options. That’s where auto insurance brokers come in. They can take the hassle and guesswork out of finding the right car insurance.
Quick Facts
A car insurance broker can help you compare auto insurance products and choose the right policy for your particular budget and needs.
Insurance brokers work on behalf of you, the buyer. This is different from an insurance agent, who represents one or more insurance companies.
Even though you don’t need to work with a broker, doing so might make sense if you have complex insurance needs, don’t have time to shop for a policy, or want someone to guide you through the process.
How a Car Insurance Broker Works
What is a car insurance broker?
Auto insurance brokers are a type of insurance agent. They typically charge a flat fee to help drivers find the perfect car insurance policy for their driver profile. Insurify can do that work too, but it’s free.
A car insurance broker can help you shop for a car insurance policy so you can choose the best coverage option for your unique situation. Brokers are different from agents; they represent the buyer, not an insurance company like Nationwide or GEICO. A broker is unbiased and will share policy information from a number of the best car insurance companies.
You can also count on a broker to explain how much coverage you may need and what type of additional coverage is worth considering. Once you decide to work with a car insurance broker, they’ll ask you for personal information like your name, address, and vehicle make and model. This way, they can provide you with several auto insurance quotes at once.
Even though a broker may not be able to get you a better deal, they can educate you on how various factors like your age and driving history affect your auto insurance rates.
See More: Best Car Insurance Companies
The Cost of a Car Insurance Broker
Typically, a car insurance broker won’t charge you for their services because they get paid through commission and receive a percentage of the insurance premiums they sell. If they do charge you, their broker’s fee will be regulated by the laws in your state. In some states, a broker can’t collect a fee or commission.
Before you move forward with an auto insurance broker, make sure you’re clear about any fees they charge. Ideally, you’d work with a broker who works on a commission-only basis. Since the commission comes from your insurance premiums, finding a policy through this type of broker won’t cost you any extra.
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Benefits of a Car Insurance Broker
There are several perks of using auto insurance brokers. You can think of brokers as personal shoppers who will help you customize your insurance coverage to meet your particular budget and needs. They’ll do the heavy lifting and gather free quotes from a variety of car insurance companies on your behalf, saving you a great deal of time and energy.
Brokers may also guide you through the application process and ensure you understand what various coverage options mean. In addition, you can reach out to them in the future if your situation has changed and you want to switch auto insurance policies or need to include additional coverage.
Drawbacks of a Car Insurance Broker
While brokers can be useful, they do come with some drawbacks. Drivers with a clean driving record and decent credit usually find that looking for a car insurance policy on their own is a relatively easy process. It might not be worth the time or cost to seek help from a professional.
Also, you might pay more for your car insurance premiums with a broker. They may steer you toward a more expensive policy than you need or sell you other products like homeowners insurance and renters insurance so they can enjoy a higher commission. Lastly, you might prefer to use a tool like Insurify to get quotes online and compare the options yourself at a time that’s convenient for you.
See More: Cheap Car Insurance
How to Choose the Right Broker
Not all auto insurance brokers are created equal. If you decide you’d like to work with a broker, don’t just go with the first one you find. Shop around for brokers and explore the various professionals available to you, just like you would if you were looking for a car insurance policy.
Once you come across a broker who piques your interest, make sure they’re licensed in your state. Then, find out how long they’ve been in the insurance industry and what their education and experience look like. Don’t forget to read customer satisfaction reviews and ratings on websites like J.D. Power.
You Can Find Car Insurance With or Without a Broker
The good news is you don’t need a car insurance broker to find a car insurance policy. But if you have a complicated situation, lead a busy life, or simply want someone to support you through the process, a car insurance broker might be helpful.
Otherwise, you can research on your own and shop for car insurance without a broker. Just make sure you compare several quotes from different insurance companies. If you have any questions, don’t hesitate to reach out to an insurance agent or the insurance provider directly.
Frequently Asked Questions
Car insurance brokers must obtain a license in their state through their state’s commissioner’s office. If they pass several exams and background checks, they can begin to work with potential policyholders and help them choose the right coverage. It’s important to note that each company that hires brokers has its own unique requirements that licensed brokers will need to meet as well.
Whether an auto insurance broker is worth it depends on your unique situation. If you have complex insurance needs, don’t have time to shop for a policy on your own, or simply want someone to guide you through the process, a broker is likely worth it.
On the flip side, if you prefer to do things yourself and have a safe driving history and simple insurance needs, an auto insurance broker won’t be very useful. You’d be better off shopping and comparing car insurance quotes on your own.
To find a reputable car insurance broker, do some research online. You can also ask your friends and family about brokers they’ve worked with and liked. Before you commit to a broker, check their credentials and make sure they’re licensed in your state. Also, read customer reviews and clarify any fees. If possible, look for independent insurance agents instead of captive agents.
The answer depends on your unique circumstances and the broker you choose. Since brokers are well-versed in the world of car insurance, they can connect you to some of the best rates that you might not have found otherwise.
However, brokers receive a commission from car insurance companies, so there’s a chance they’ll upsell a policy to you. They might also charge you a broker’s fee. There’s no guarantee you’ll get the best price if you work with them. Comparing car insurance online is the easier, cheaper option.
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Data scientists at Insurify analyzed more than 40 million real-time auto insurance rates from our partner providers across the United States to compile the car insurance quotes, statistics, and data visualizations displayed on this page. The car insurance data includes coverage analysis and details on drivers' vehicles, driving records, and demographic information. Quotes for Allstate, Farmers, GEICO, State Farm, and USAA are estimates based on Quadrant Information Service's database of auto insurance rates. With these insights, Insurify is able to offer drivers insight into how companies price their car insurance premiums.
