A car insurance broker is someone drivers seek out to make sure they get the right auto insurance coverage for their particular needs. The broker does the legwork so drivers don’t have to, and may be able to get their clients a better deal on car insurance.

One thing to know about working with an insurance broker is that you may pay a fee for the broker’s service and should factor that cost into your monthly or annual premium to ensure you’re getting a good deal. 

When deciding which broker to engage, ensure they’re licensed in the state where the potential insured lives and check reviews from the Better Business Bureau.

Key Highlights
  • Car insurance brokers aren’t tied to a single insurance company like a captive insurance agent, so they can choose from various coverage offerings and companies.
  • Using an auto insurance broker can save insurance shoppers time and money.
  • To select an insurance broker, contact friends, family and co-workers to get referrals.
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Written by:
Heather Larson
Our Carinsurance.com team is made up of regular people with insurance policy needs, just like you. We just happen to know a little more about insurance than the average bear.
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Reviewed by:
Laura Longero
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Executive Editor
Laura is an award-winning editor with experience in content and communications covering auto insurance and personal finance. She has written for several media outlets, including the USA Today Network. She most recently worked in the public sector for the Nevada Department of Transportation.

What is a car insurance broker?

An insurance broker researches insurance providers, assembles quotes and compares what is available in the marketplace. After completing research, an auto insurance broker presents the information to their client. Auto insurance brokers don’t work for insurance providers. Instead, they provide a service to insurance shoppers. 

They usually work on a commission that the insurance company pays. Sometimes they also charge a fee to the person seeking insurance. Insurance brokers can be self-employed or work for an insurance brokerage.

What does an insurance broker do?

Car insurance brokers have many responsibilities. They gather information from their clients about what they require for coverage and their specific circumstances; another insurer might have canceled them or they might have a perfect driving record. After researching the type of policies available, they present those to their client. Insurance brokers also must stay on top of insurance trends and let their insured clients know when their insurance provider makes any changes to policies.

A local insurance broker usually works with car, homeowners insurance, health and other types of insurance to increase their income. 

Here’s a typical first encounter with a broker and client: An auto insurance broker acts as the middle person between a customer and an insurance company. They find out the customer’s coverage needs and then suggest the most fitting insurance product and the one with the most reasonable cost. 

Types of car insurance brokers

Three kinds of auto insurance brokers exist. Drivers should make sure to engage one that fits their needs.

“The three different types of car insurance brokers are retail, wholesale and surplus lines brokers,” says Lynne McChristian, director of the Office of Risk Management & Insurance Research at the University of Illinois-Urbana Champaign’s Gies College of Business. 

Individuals work with retail brokers, businesses seek out wholesale brokers and when coverage becomes a complex issue, a surplus lines broker takes over, she says. 

Pros and Cons of Car Insurance Brokers

Pros of working with a car insurance broker

  • They save time by doing the heavy lifting and may be able to find deals an individual can’t.
  • They know what auto insurance is available in the marketplace and can easily discern the appropriate coverage for a client.
  • Car insurance brokers aren’t tied to a single insurance company like a captive agent, so they can choose from a wide range of coverage offerings and companies.

Cons of working with a car insurance broker

  • Auto insurance brokers can’t sell insurance policies, so when it comes time to buy, drivers must work with an insurance company representative.
  • A fee may be charged to the person shopping for insurance.
  • Insurance brokers work on commission from insurance companies, so an unethical broker may try to push you into the policy that gets them the highest commission.

Learn more about whether you need a car insurance broker

How to choose a car insurance broker

McChristian says to talk with friends, family and co-workers to get referrals. Ask what kind of experience they have had with brokers. In addition, search online and read customer testimonials on brokers’ sites.

“Because insurance is regulated at the state level, another good source is the state insurance website where the potential customer lives,” McChristian says. “This resource lists where brokers are licensed to do business in the state. It also reports any complaints or issues with a specific broker.” 

What are the differences between an insurance broker and an insurance agent?

Both an auto insurance broker and an insurance agent are considered insurance producers. A broker acts on behalf of the customer who hired them and can offer policies from multiple insurance companies. 

A captive agent only sells insurance coverage from a certain provider – the company they contracted with. An independent agent sells policies from different companies and has access to multiple company quotes and insurance products. 

Frequently Ask Questions: Car insurance brokers

Is it better to get insurance through a broker?

It all depends on the circumstances. When drivers have crazy, busy schedules and don’t have time for insurance research, a broker will gather the appropriate information. They help their clients by finding the prices and terms for several insurance policies.

When a consumer knows exactly what kind of policy they want and from which insurance company, buying a policy on their own or from an agent makes more sense. 

Find out if buying car insurance online is more cost-effective than using an agent

Will I save money by buying car insurance through a broker?

Car insurance is an unavoidable expense that makes a big impact on a budget. Insurance could easily run between $1,000 and $2,000 or more depending on the number of vehicles that need insurance. An auto insurance broker has the expertise and knowledge to find a policy with the lowest price.

Do insurance brokers handle claims?

No. Although a broker does not handle claims, they can investigate the accident and advise the insured. Claims adjusters are the people who process claims.

What information will an insurance broker need from me?

Brokers must establish a new client’s profile – this includes basic client information like their name, age and address. McChristian says the insurer will want to know the insured’s date of birth because certain age groups pose more risk while driving than others.

Other common questions: Is the vehicle in question kept in a garage or not? What is the make, model, mileage and year the car was manufactured? They’ll also need the driver’s social security number and driver’s license number and will request an insurance claims history report.

How do insurance brokers make money?

Brokers are salespeople and don’t work for free. Their main sources of income are commissions from the insurance companies when they sell one of their policies, typically between 2% and 8%. Brokers also sell other insurance products –  homeowners, life, accident and health insurance.

Some brokers may charge their clients a fee; if they do, it should be disclosed upfront.

Resources & Methodology

Sources

  1. Experian.com. “Should I use an insurance broker to buy insurance?” Accessed November 2023.
  2. Experian.com. “Insurance Agent vs. Insurance Broker” Accessed November 2023
  3. Insurance Information Institute. “Facts + Statistics: Auto Insurance.”  Accessed November 2023.
  4. Insurance Information Institute. “Background on buying insurance” Accessed November 2023.
  5. Salary.com. “Insurance Broker Salary” Accessed November 2023.
  6. Insure.com. “How much do auto insurance agents make?” Accessed November 2023.
  7. Indeed.com. “What does an Insurance Broker Do? (Plus Salary and Skills)” Accessed November 2023.
Laura Longero

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Laura Longero

Executive Editor

Laura is an award-winning editor with experience in content and communications covering auto insurance and personal finance. She has written for several media outlets, including the USA Today Network. She most recently worked in the public sector for the Nevada Department of Transportation.

John McCormick

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John McCormick

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John is the editorial director for CarInsurance.com, Insurance.com and Insure.com. Before joining QuinStreet, John was a deputy editor at The Wall Street Journal and had been an editor and reporter at a number of other media outlets where he covered insurance, personal finance, and technology.

Leslie Kasperowicz

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Leslie Kasperowicz

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Leslie Kasperowicz is an insurance educator and content creation professional with nearly two decades of experience first directly in the insurance industry at Farmers Insurance and then as a writer, researcher, and educator for insurance shoppers writing for sites like ExpertInsuranceReviews.com and InsuranceHotline.com and managing content, now at CarInsurance.com.

Nupur Gambhir

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Nupur Gambhir

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Nupur Gambhir is a content editor and licensed life, health, and disability insurance expert. She has extensive experience bringing brands to life and has built award-nominated campaigns for travel and tech. Her insurance expertise has been featured in Bloomberg News, Forbes Advisor, CNET, Fortune, Slate, Real Simple, Lifehacker, The Financial Gym, and the end-of-life planning service.

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