Auto Insurance Brokers and Agents

In the world of auto insurance brokers and agents, there are two very different professions. Essentially, an auto insurance agent is, in some capacity, a representative of an insurance company. They might be a franchise owner, but nevertheless, they are authorized to sell the insurance offered by that particular company. An auto insurance broker, on the other hand, is in the business of finding insurance for a client. They are not the agent of the insurance company; rather, they develop relationships with agents in order to pass business to them.

Sometimes it is far easier to hire an auto insurance broker than to make all the necessary phone calls yourself. If, for example, you work for a business looking to insure a fleet of vehicles, it might be worth the commission you will pay the broker to let them find the best deal for you. You do not pay an insurance broker to insure your vehicle(s). They make their money through commissions. Basically they are middlemen, but depending on the situation, they offer a beneficial service. Because they constantly do business with insurance agents, they may be able to secure a better deal through them than you would on your own.

The price you pay for using a broker is a commission. That is a fee that will be on top of whatever you end up paying for auto insurance. If you can afford it, or if the insurance budget of your business allows it, a broker can save you time otherwise spent checking with several insurance companies for the best rates.

Auto insurance agents are very different from brokers, as they actually sell you the insurance policy. Brokers simply help you find the best prices for insurance—for a fee. Understanding the difference can make your next insurance purchase more thorough and informed.