-
The Anatomy of Auto Insurance Brokers
An auto insurance broker is a person licensed to sell insurance. Just as in other industries, there are agents and brokers. An agent can advise and fill out the forms to sell insurance, real estate, stocks and bonds under a licensed broker. Most insurance agencies have a broker on staff or are associated with a licensed broker to sign off on their sales.
There are two main options to buying insurance for your vehicle. These two options are visiting a local auto insurance sales office or shopping online. Of these two options, there are also another two options, shopping from an office or site who sells directly for their company or an agent or site that offers insurance for more than one company.
Now with the Internet, there are many sites that offer auto insurance available online. Most of these are no different than sitting in an office and purchasing insurance for your vehicle. These sites, just as visiting an insurance sales office, will offer insurance from different companies and what those companies offer without the overhead costs of renting and furnishing an office, utilities, or hiring a staff. Unfortunately some of these sites do not let you compare prices from the different companies and will offer a policy from the company they make the highest commission.
What Auto Insurance Brokers Do
When you are shopping for car insurance, an auto insurance broker can help you in many ways. Because auto insurance brokers write policies for multiple insurance companies, they are usually aware of which companies offer the best coverage options and lowest premium rates for a particular type of car insurance policy – based on the type of vehicle to be insured, your age and gender and your own personal driving record.
Other Types of Auto Insurance Brokers
Although auto insurance brokers are usually agents that offer, or “broker”, different types of policies for multiple companies, online websites that allow you to compare quotes and purchase policies from multiple companies basically perform auto insurance policy brokering services as well. Because these websites do not represent or offer car insurance policies for one specific company, they are in fact acting as a broker on your behalf – by helping you to find the lowest prices for certain types of car insurance coverage.
How Auto Insurance Brokers are Paid
Like standard captive auto insurance agents, auto insurance brokers are paid commissions by the insurance companies they sell policies for. Customers purchasing policies from auto insurance brokers simply pay the premiums to the broker, or independent agent and the broker received his/her payment from the insurance company. You should avoid auto insurance brokers that ever try to charge you a service fee for their services.
Automobile insurance has three main components. There is liability insurance that protects you from damages or injury caused by your vehicle. Then there is medical coverage that pays for any medical or hospital bills for you and any passengers in your vehicle during the accident. The last are actually two coverage’s but are usually grouped together. These are also collision and comprehensive coverage. Collision covers damage to your vehicle and comprehensive covers things like theft, vandalism or fire.
There are also minimum coverage requirements directed by a car loan, lease or if you are using your car for a business such as deliveries. There are also other options that can be included in your car insurance policy. Unless you know all these options, it can get confusing working through all the pull down menus, options and variations that will come up while buying insurance online. There are many items that link to other options. If you decline one, you might not be able to choose something else. This can cause frustrations while working through all the items on an online form.
By visiting a local insurance agency, the agent can discuss your needs and considerations with you. Through these discussions an agent can get a clear understanding and can help you purchase a policy to fit your needs.
