Shopping for an insurance policy isn’t exactly fun, and it may seem easier to pass off the task to someone else. But do you really need an auto insurance broker?
What is an auto insurance broker?
An auto insurance broker is a special type of car insurance agent. Auto insurance brokers act as an intermediary between the driver and the insurance company. They typically charge a flat fee to help a driver find and purchase the right insurance policy. While drivers can benefit from a broker's specialized knowledge about the insurance world, brokers are paid commissions for each sale from car insurance companies, which can sometimes incentivize them to sell drivers a more expensive policy than they really need.
Before answering that question, you should probably familiarize yourself with all the different ways you can buy auto insurance.
1) Buy directly from insurance companies
Perhaps you’re well versed in your insurance needs and have a preferred insurance provider. In this case, you can go directly to a carrier’s website, input your personal information, and purchase your insurance plan directly from the company itself. Even if you’re more or less set on a specific provider, you should still shop around for plans on Insurify to make sure you’re not overpaying. You might end up saving an average of $585 annually!
2) Talk to a captive agent
Captive agents are insurance agents who work for specific insurance carriers. They’re a good option if you already have a carrier in mind, but want to know more about what insurance plans, deals, and discounts the carrier offers. Remember: since captive agents work for specific carriers, they will only have quotes for that carrier.
3) Connect with an insurance broker
There are many different kinds of insurance brokers. Brokers can help you compare policies for all kinds of insurance products and insurance services: life insurance, renters insurance, health insurance, business insurance for small businesses, and more. A car insurance broker works on your behalf to get you the best car insurance quotes and discounts. Similar to captive agents, auto insurance brokers will tell you about different deals and discounts you could be eligible for.
But instead of working for a specific carrier, insurance brokers are more like independent contractors who spend their time looking for the best deals without any allegiance to a particular insurance company. They will also negotiate with carriers to get you a lower price, hence the “broker” in their title. They look out for your best interests, as opposed to those of any specific carriers.
Many people find insurance brokers to be an attractive option because they do all the legwork of finding and comparing multiple insurance quotes. But insurance brokers also have a few drawbacks you should be wary of before deciding to contact one.
Here’s a list of pros and cons to help you with your decision:
Pros of having an insurance broker
- They understand industry terms. Reading through insurance materials can be a drag, especially when you have to regularly Google “what is uninsured motorist bodily injury coverage” and figure out if you really need it (side note: you might!). Insurance brokers, on the other hand, can figure it out for you. They’ve typically been a part of the insurance industry, and are well-equipped to understand various coverage options and explain them to you too.
- They can assess your needs. Maybe you live in a state with a higher probability of natural disasters. Or perhaps you live in a state where a lot of drivers don’t have insurance. Insurance brokers can assess your needs based on information like your location and demographics, and help you find an insurance plan that fits your profile. Insurance brokers can also alert you when you’re eligible for certain discounts based on your demographics, whether or not you’re married, whether you’ve served in the military, and if you’re currently a student.
- They are independent of any one insurance company. While State Farm’s agents have a vested interest in your purchasing a State Farm car insurance policy, auto insurance brokers have no such obligation to car insurance companies. This makes them ostensibly unbiased in their pursuit of finding the best price for your car insurance. And unlike independent agents, brokers advocate for the customer––not the insurer.
Cons of having an insurance broker
- They work on commission. Most insurance brokers work on a commission—they collect about 15-20 percent of their clients’ annual insurance rates, paid for by the insurance carrier. So while insurance brokers don’t have an allegiance to any one carrier, they might push you to buy more expensive insurance plans, so they get paid more money.
- They may be unnecessary. You probably don’t need an insurance broker if you have a safe enough driving record and aren’t looking for anything other than meeting your state’s minimum requirements. You could easily find auto insurance quotes on sites like Insurify, or by just reaching out to individual carriers.
- Auto insurance comparison websites work better. Insurance comparison websites like Insurify use the latest technology and artificial intelligence to display free quotes that fit your profile and are tailored to your specific insurance needs. They also allow you to find and compare insurance quotes across 20 different insurance providers all on the same page—all for free.
Chances are, you’ve already spent too many hours surveying insurance websites trying to figure out which insurance carrier is going to give you the best deal. But instead of spending even more time contacting an auto insurance broker, updating them with all your information, and waiting a few days for them to get back to you, you could use Insurify.
It’s frustrating to have to rely on insurance agents and brokers to have your best interests in mind when advising you on an insurance policy or bundled deal. You never know if they’re really giving you the cheapest quotes since they have a vested interest in making you buy pricier premiums. That’s why using a quote-comparison site like Insurify can be key to finding the best rates and most comprehensive insurance coverage on car insurance and homeowners insurance.
|Helps you understand policy terms||Yes||Yes|
|Shows you deals and discounts for your profile||Yes||Yes|
|Gives you all the best deals||No||Yes|
|Completely free of cost||No||Yes|
Insurify acts like a 24/7 virtual insurance agency, providing more insurance rates than any one insurance agent or broker could find and displaying them for free. On average, Insurify customers save an average of $585 per year on car insurance. With an average customer satisfaction rating of 4.75/5 from 3000+ reviews, Insurify is the #1 highest-ranked insurance comparison platform in America. And unlike other quote comparison websites, Insurify never sells customer data to scammers or sends unwanted calls or texts.
You can compare auto insurance policies yourself, speak to a licensed agent, and look out for your own best interests, instead of relying on anybody else. Save money and time, and slash your insurance premiums while still getting the best coverage—all for free!
Auto Insurance Brokers: Quick Questions
What does a car insurance broker do?
A car insurance broker is a special type of car insurance agent. Auto insurance brokers act as a go-between between the driver and the insurance company. They charge a flat fee to help a driver find and purchase an insurance policy that suits their needs. Though a broker's extensive knowledge about car insurance can help drivers score special discounts and deals, brokers are paid commissions for each sale from car insurance companies. That can sometimes cause brokers to sell drivers a more expensive policy than what they really need.
How can I become an auto insurance broker?
There are a few simple steps you can take to become an auto insurance broker, though the exact steps vary from state to state. First, you'll need to contact your state's Department of Insurance and sign up for a licensing exam. You may also be required to take one or more classes. Once you hit the books and pass the exam, you'll get your broker's license in the mail––but if you want to sell car insurance specifically, you may face further licensing requirements.
Is car insurance cheaper through a broker?
The answer to this question depends upon your individual circumstances. Because car insurance brokers tend to have a lot of specialized knowledge about insurance, they can often score their customers great deals that previously flew under their radar. But unlike online insurance comparison websites like Insurify, car insurance brokers charge a flat fee for their services. And because brokers receive a commission from car insurance companies for each sale they make, they can also be incentivized to upsell policies to customers.