Rachael Brennan has been working in the insurance industry since 2006 when she began working as a licensed insurance representative for 21st Century Insurance, during which time she earned her Property and Casualty license in all 50 states. After several years she expanded her insurance expertise, earning her license in Health and AD&D insurance as well. She has worked for small health insuran...

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Chris Harrigan has an economic degree from Limestone College and an MBA from Clemson University. He previously managed auto insurance claims for Enterprise Rent-A-Car. Currently, he is using his business and insurance expertise to provide insurance data analysis and visualizations to enhance the user experience.

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Reviewed by Chris Harrigan
Former Auto Insurance Claims Manager Chris Harrigan

UPDATED: Mar 8, 2022

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Key Takeaways

  • Auto insurance brokers work to represent your needs as you look for the best insurance policy for you
  • Using a broker to decide which insurance policy suits you provides many advantages in what can be a confusing process
  • You can become a broker and learn to help people pick the insurance policies that provide the best coverage for their needs

What do auto insurance brokers do?

They work to find the most suitable auto insurance policy for you based on your exact needs. They can help you find ways to save money on your policy, and they can even sometimes find you discounts you wouldn’t find elsewhere. An insurance broker has a duty to represent their client’s financial interests. Their primary function is to help clients research and identify the policy specifications that satisfy their needs.

There are two kinds of insurance representatives you might encounter as you search for your perfect auto policy: insurance brokers and insurance agents.

Agents work for insurance providers, while brokers work for you, the consumer. Brokers represent their clients and have a duty to provide impartial advice and act in your best interest. Agents represent the providers they work for and therefore their company’s needs will always come first.

Insurance agents are more of a mediator between consumers and the company they represent. They have contractual agreements that outline the specific policies they can sell. In other words, the company they work for is always their top priority. Unlike agents, brokers cannot bind a policy to a customer because they are not representatives of insurance companies. Brokers instead act as your voice in the overall insurance world.

Benefits of a Car Insurance Broker

Selecting the right insurance for your needs can be difficult. State auto insurance requirements vary, so there are countless options to select from, and they all want to provide you with coverage.

For people with high-risk factors that make finding coverage difficult, an insurance broker can provide assurance in the process.  An auto insurance broker knows how to streamline the process and filter through all of the options to find the best policy for you.

Their services provide many ways to help you save and keep you covered.

Money

You’ll have someone who shops on your behalf. They will work to identify your needs and they’ll do all of the policy comparisons for you.

It’s alright if you’re struggling to find what you need out of an auto insurance policy. Some people buy too much coverage and therefore end up wasting money rather than saving it. The knowledge of a broker can focus your efforts and protect you from the risk of underestimating your coverage needs.

Brokers earn their money via commission. Most commissions are between 2% and 8% of premiums based on state regulations which will be factored directly into your coverage price.

Even if they charge service fees in addition to commission, they can still save you money in the long run. For instance,  a broker might charge you a $100 service fee, but they secure you a policy that saves you $100 per year. If you keep that same policy for three years, you will have saved $200 during that time period.

Time

Using a broker doesn’t just allow you to save money, but it can also help you save a tremendous amount of time. Auto insurance brokers know all of the ins and outs of signing up for a policy, and they already have all of your application information readily accessible. Brokers can use your information to narrow down your options very quickly.

Not only will an auto insurance broker help you find the best coverage, but they can also address any concerns or questions you might have. Brokers make it easy to deal with insurance issues such as filing a claim or answering billing questions.

Continued Support

Your coverage needs will likely change over time, and a broker can be there to help you through those adjustments along the way. If you need to add your child who just became driving age, or if you’ve gotten married and share a vehicle, a broker can take all of your needs into account and continue finding the best auto insurance options for you.

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Should I hire an auto insurance broker?

If you make the choice to seek the assistance of a broker, do your homework and look into their background.

  • Verify the broker’s state license by visiting your state’s department of insurance. All auto insurance brokers are required to be fully licensed in your state in order to sell policies in your state. These licenses are your guide to measuring a broker’s qualifications, and they preserve the integrity of the insurance industry as a whole. Licensing requirements vary from state to state.
  • Investigate if they have had any complaints against them through state agencies or the Better Business Bureau.
  • Check to see if the broker charges service fees. In some cases, even if fees are charged, their expertise will pay off in the quality of coverage they find for you. Take everything into account and decide if the fees are worth their service.

Brokers have an important role in the process of finding the best auto insurance coverage by providing people with an advocate in the insurance world who will get you the best possible policy.

You can buy insurance without the assistance of a broker. You can get car insurance quotes online, but a broker can perform all of the research for you while analyzing your risk portfolio to have a policy approved on your behalf. They do not decide the price you pay, but they can help negotiate with the companies to get you the best deal possible.

How can I become an auto insurance broker?

Are you interested in becoming an insurance broker and working with clients directly to solve their insurance needs? If so, there are several steps to take. Brokers make a major difference in people’s lives, so they are required to meet all of the legal and ethical guidelines.

  • Check your state’s requirements for insurance brokers. Every state is different. Some require degrees while others do not. Some states require a producer license instead of a broker license. Perform a search for your state’s department of insurance to help you find out all of the pre-licensing requirements.
  • Expect coursework covering ethics and the ins and outs of insurance. Most states require completing a qualifying exam covering state laws and insurance codes. Depending on your specialty, you might require several qualifying exams.
  • Obtain all of the necessary training and submit an application to your state insurance agency.

Some states also require fingerprint scans for a background check. Once you receive your official license, you’ll be legally free to conduct insurance sales, build clientele, and apply for jobs with agencies or brokerages.

Car insurance broker salary

If you are interested in becoming an insurance broker, you might be asking yourself, “How much can I earn?” It varies greatly from state to state, but regardless of location, it’s possible to make a healthy living by offering people assistance with their insurance coverage.

  • The average salary for insurance brokers in the US is around $72,000.
  • Salary rates vary from state to state with Washington topping the list at more than $94,000.
  • The state with the lowest average salary for insurance brokers is North Carolina coming in at just over $61,000.

Entry-level brokers with less than one year of experience can earn an average salary of slightly over $48,000.

What do auto insurance brokers do?

Auto insurance brokers can be your greatest ally if you’re a high-risk client for coverage options. They will work for you with a level of expertise you won’t be able to find directly from an insurance agent.

Even when you factor in the price of their help, brokers are there for you to help you save the most money possible while maximizing your insurance protection. They’re more than just insurance salesmen. A great insurance broker acts as your voice in a complicated marketplace.