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Auto Insurance Brokers: Should You Use One?

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Anna Baluch

By: Anna Baluch

Edited by Jackie Cohen | Reviewed by licensed insurance agent, Amber Benka

Last Updated May 10, 2022

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Quick Facts

  • A car insurance broker can help you compare auto insurance products and choose the right policy for your particular budget and needs.
  • While a captive broker represents a single insurance company, an independent broker is unbiased and has access to quotes from a number of insurance providers.
  • 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.

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 buying car insurance.

Just like a car insurance broker, Insurify will provide you with all the info you need to compare car insurance rates. You don’t have to worry about any fees or sign-ups. In just five minutes or less, you can receive personalized quotes and choose the right policy for your needs.

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. While a captive broker works for an individual car insurance company like Nationwide or GEICO, an independent broker is unbiased and will share policy information across 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 your 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 than another broker or a local agent, 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’ll get paid through commission and receive a percentage of the insurance premiums they sell. If they do, however, 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 they’re clear about any fees they charge. Ideally, you’d work with a broker who works on a commission-only basis. Since the commission is packed into your insurance rates, buying 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 add on additional coverage.

Drawbacks of a Car Insurance Broker

While brokers can be useful, they do come with some drawbacks. If you have a clean driving record and decent credit, looking for a car insurance policy on your own should be a relatively easy process. It might not be worth your time to seek professional help.

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 that 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.

See More: Best and Worst Sites to Compare Car Insurance

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. 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 do your own research 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 offices. If they pass several exams and background checks, they may 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.

  • Captive agents only represent one auto insurance company or a group of insurance providers. This means they may be biased, and there are limits on how many quotes and options they can share with you. Independent brokers, on the other hand, work with a variety of car insurance companies and are less likely to pigeonhole you into a certain coverage option.

    They might share quotes from Liberty Mutual, State Farm, Allstate, and many others. It’s always best to work with an independent broker when possible. Insurify can act as your personal insurance broker at no cost to you.

  • 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’re a DIY-er with 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, which can increase the cost of your car insurance as well. 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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Methodology

The car insurance quotes displayed are based on an analysis of Insurify’s database of over 40 million quotes from 500 ZIP codes nationwide. To obtain representative rates, Insurify’s data science team performs frequent comprehensive analyses of the factors car insurance providers weigh to calculate rates including driver demographics, driving record, credit score, desired coverage level, and more.

Insurify’s analysis also incorporates the Insurify Composite Score (ICS) assigned to each insurance provider. The ICS is a proprietary rating that weighs multiple factors reflecting the quality, reliability, and health of an insurance company. Ratings used to calculate the ICS include Financial Strength Ratings from A.M. Best, Standard & Poor’s, Moody’s, and Fitch; J.D. Power ratings; Consumer Reports customer satisfaction surveys and customer complaints; mobile app reviews; and user-generated company reviews. 

With the above insights and ranking methods, Insurify is able to offer car insurance shoppers insight into how various insurance providers compare to one another in terms of both cost and quality. Note, actual quotes will vary based on unique attributes including the policyholder’s driver history and their garaging address.

Anna Baluch
Anna Baluch
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Content Writer at Insurify

Anna Baluch is a Cleveland-based freelance writer with a focus on personal finance and insurance. She enjoys writing educational content that helps people make smart financial decisions. Her work can be seen across the internet on many well-known publications including Freedom Debt Relief, Credit Karma, RateGenius, and the Balance.

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