Diego Anderson is a Real Estate Agent based in the Bay Area of California. Having received his Real Estate License at the age of 18, he wasted no time learning the ins and outs of the industry. He has always focused on learning the latest tools and technologies. With a focus on residential dual agency, he loves supporting and educating families on their home buying and selling decisions. He is ...

Full Bio →

Written by

Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years. He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com.

Full Bio →

Reviewed by Daniel Walker
Licensed Auto Insurance Agent Daniel Walker

UPDATED: Apr 13, 2022

Advertiser Disclosure

It’s all about you. We want to help you make the right coverage choices.

Advertiser Disclosure: We strive to help you make confident insurance decisions. Comparison shopping should be easy. We are not affiliated with any one insurance provider and cannot guarantee quotes from any single provider.

Our insurance industry partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different insurance providers please enter your ZIP code above to use the free quote tool. The more quotes you compare, the more chances to save.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.

The Lowdown

  • Car insurance brokers act as a bridge between customers and insurance companies
  • Brokers are typically paid policy commissions that are already a part of the final rates
  • If you want to shop around and compare different car insurance companies, you should seek an independent broker

Shopping for car insurance can be overwhelming, no matter your situation. For some people, it can be even more involved. If you need to insure multiple drivers and vehicles, then your coverage needs might be complex. In this case, you may benefit from working with an insurance broker.

Insurance brokers act as a bridge between the insurance company and the customer. A car insurance broker is specially trained in the nuances of policies and coverages. Whether you need to work with a car insurance broker depends on your specific needs. Before hiring a broker or agent, you should first compare quotes from different car insurance companies.

What is a car insurance broker?

An insurance broker is a professional specially trained in the fine details of policies and coverages. Auto insurance brokers act as intermediaries between the insurance company and the customer. A broker can help customers better understand what policy will best suit their needs.

Most insurance agents are also considered brokers. Brokers and agents are important players in the insurance industry. While many people might be fine with selecting an off-the-shelf insurance product, this is not suitable for everyone.

If you have complex insurance needs, you will likely benefit from hiring an insurance broker. There are nuances to car insurance coverage that take extensive research and training to understand fully. Car insurance brokers have already gone through this necessary training.

If you have complex insurance needs, you will likely benefit from hiring an insurance broker.

Employing the assistance of a car insurance broker can save you the headache of researching what policy is right for you. Because you have a busy life, you likely cannot dedicate hours to reading the fine print of dozens of different car insurance policies.

Hiring an insurance broker rarely costs more than purchasing insurance by yourself. There are different types of insurance brokers and those who collect payment differently. Depending on your needs, you should evaluate what kind of insurance broker is right for you.

Compare Insurance Providers Rates to Save Up to 75%

secured lock Secured with SHA-256 Encryption

What is an independent car insurance broker?

There are two main types of insurance brokers: independent and captive. Independent car insurance brokers are self-employed and can simultaneously work with multiple auto insurance companies. An independent broker can compare policies from most options in your area.

If you want to compare quotes for policies from various car insurance companies, you should seek an independent broker. An independent car insurance broker will do the heavy lifting for you.

After you provide your information to your insurance broker via a car insurance application, they will explore coverage options that meet your needs. They can narrow down policies to those that offer the coverage you need and the budget you have set.

Once the car insurance broker has found a handful of suitable policies, they will walk you through your options. You can sit down with a car insurance broker and discuss each policy in detail. The insurance broker can offer easy-to-understand answers when you have pressing questions about the coverage you need.

What is a captive agent?

Whereas an independent broker can work with any insurance company, a captive agent is limited to only a few. Captive agents enter into contracts with an insurance company or group of companies.

Working with a captive agent limits your options for comparing quotes from different companies. One benefit of captive agents is they may have even more detailed knowledge of the policies they sell.

A captive agent is a great option if you already have a favorite car insurance company that you would like to stick with. The agent can help you fully understand the different options available from your car insurance company.

A captive agent can help you if you need to add to your coverage. They will be especially knowledgeable in the different bundling options available through the car insurance company they represent. Your captive agent will be able to find you the right add-ons and discounts to build the perfect policy.

How do car insurance brokers make money?

An insurance broker’s salary typically comes in two forms. Generally, car insurance brokers get paid a commission on the policies they sell. This commission is already a part of the final car insurance rates. You are not paying more by purchasing a policy through a broker than buying a policy individually.

Regardless of how you purchase a policy, the insurance company has already invested those funds. When you buy a policy directly from the company, the live agent that helps you build your coverage is likely a captive agent. They get paid the same commission that any other broker would make.

You are not paying more by purchasing a policy through a broker than buying a policy individually.

The commission a broker makes represents a percentage of the policy’s final rates. You should be aware that some brokers may try to upsell you to get a larger commission. Independent insurance brokers rely on reputation to keep business. Word of mouth is critical to their business, so a reputable insurance broker is less likely to upsell.

Sometimes insurance brokers charge an additional fee. Brokerage fees are regulated and typically competitive. Even when purchasing an expensive policy, the brokerage fee is not likely to break the bank. Independent car insurance brokers usually charge brokerage fees. A broker that charges a fee may be less likely to upsell. They have a set compensation not dependent on the policy’s rates.

Compare Insurance Providers Rates to Save Up to 75%

secured lock Secured with SHA-256 Encryption

Who needs a car insurance broker?

Not everyone needs to work with an independent car insurance broker. If you have a simple situation like one car and a clean driving history, then you probably don’t need to work with an insurance broker. People with complex insurance needs benefit from hiring brokers.

If you need to purchase car insurance for a large family with many drivers – including high-risk teen drivers – and multiple cars, then your insurance needs might be more complex. Small business owners who operate company fleets also have complicated insurance needs. Additionally, car collectors who have expensive vintage vehicles would benefit from customized coverage provided through a broker.

What are the best car insurance companies that offer brokers?

Car insurance brokers are available through most insurance companies. These insurance professionals help customers purchase policies to best suit their needs. When shopping locally, you are more likely to work with an independent car insurance broker. Captive agents work with one insurance company or group, and you are more likely to encounter them when purchasing a policy from a national brand.

Regardless of your needs, shopping for a car insurance policy can be overwhelming. If you have an especially complex situation, then the intricacies of shopping for car insurance are further compounded.

We hope this article has helped answer some of your questions regarding car insurance brokers. Before working with a broker, you should compare quotes from different car insurance companies. By seeing quotes compared side-by-side, you will better understand whether you would benefit from working with an independent or captive broker.