Do I Need a Broker to Buy Car Insurance?

What Is a Car Insurance Broker?

Think of a car insurance broker as a bridge that connects you to multiple insurance carriers. Brokers can approach insurers on your behalf to gather quotes and compare rates and policies. From there, you can decide which one is right for you. This can simplify the process of getting car insurance. Brokers can also help you better understand your policy options and coverage details.

Learn more: What Is an Insurance Broker?

Do Car Insurance Brokers Work for Insurance Companies?

Insurance brokers are not employed by insurers, but they may earn a commission if someone purchases a policy through them. The amount is typically based on a percentage of the premium policy. That serves as motivation for brokers to find you a good policy that you'll stick with over the long term. Some brokers may also charge a fee for their services. Fees can vary by state but should be disclosed upfront.

How Do You Buy Insurance Through a Broker?

Begin by researching brokers in your area who specialize in auto insurance. Asking for recommendations from friends and family might also be helpful. Once you have a short list, it's wise to verify their credentials and make sure they're properly licensed before moving forward. Your state's insurance department can be a great resource here. Also consider reading customer reviews and checking each insurer's Better Business Bureau rating. From there, you can meet with potential brokers to get a feel for how they work and get paid.

Just be aware that brokers are different from independent insurance agents. A "captive agent" is an insurance agent who works for a single insurer, so their goal is to match consumers with that particular insurance company. Independent agents might represent multiple insurers. Brokers, on the other hand, do not work for insurance companies. While they may receive a commission from certain insurers, they ultimately work for the consumer. They may also cast a wider net when gathering quotes and policy information.

Pros and Cons of Using an Insurance Broker to Purchase Car Insurance

Working with a broker could help you save money on car insurance, but there are some important pros and cons to consider.

Should I Use an Insurance Broker?

Whether a car insurance broker is right for you will depend on your needs and what you're looking for in a policy. Here are some important things to think about before making a decision.

When to Consider Using an Insurance Broker

Every situation is different, but it might make sense to work with an insurance broker if:

• You have unique coverage needs. That may be the case if you're insuring multiple cars, have a teen driver or want to bundle your home and auto insurance policies.
• You don't have time to compare quotes yourself. If your plate is full as it is, gathering quotes and comparing policies may be difficult. A broker can take these tasks off your shoulders—sometimes free of charge.
• You want professional insights. You might have specific questions regarding your policy and coverage needs. An experienced broker can provide expert guidance.

When You Might Not Need an Insurance Broker

A car insurance broker isn't always necessary. You might take a do-it-yourself approach if:

• You have a simple driving profile. Your insurance needs may be pretty straightforward, especially if you're looking for basic coverage and don't have additional questions or concerns.
• You already have a strong relationship with an insurer. If you're happy with your insurance carrier, you might choose to renew your policy on your own. In some cases, you might get a discount for maintaining ongoing coverage with the same insurer.
• You want to avoid fees. You won't be charged a broker fee if you buy a policy directly from an insurance company. If you do want additional help, independent insurance agents typically do not charge fees.

How to Save on Car Insurance

Working with a broker isn't the only way to save money on car insurance. Consider these alternatives:

• Contact your insurer. Start by asking if you're eligible for any discounts. If you're experiencing financial hardship, they may be open to reducing your premium.
• Increase your deductible. This is the amount you'll pay toward a claim before your policy kicks in. A higher deductible usually results in a lower premium.
• Search for policies on your own. Experian has a simple tool that makes it easy to compare auto insurance quotes.
• Reduce your coverage. This might be a good option if you have an older car that's already paid off, but make sure your coverage is aligned with your risk tolerance.
• Maintain a strong driving record. Your insurer might lower your rate if you consistently demonstrate safe driving. Taking a defensive driving course could also reduce your premium.

Frequently Asked Questions

The Bottom Line

A car insurance broker can save you time by researching insurers, comparing policies and answering any questions you may have about your coverage—but every broker is different so you'll want to do your research to find the right match for you. In some cases, you might find a low-cost car insurance policy on your own.