Are there any benefits to use an Auto Insurance Broker?
Auto insurance brokers help individuals and businesses with shopping multiple insurance companies for affordable insurance coverage that meets the needs of the insured. In some cases, insurance brokers can negotiate lower premiums with the carriers based on prior experience and losses; only with commercial risks. Most auto insurance brokers also provide coverage for property as well which enables the opportunity for the multiple policy discounts.
How do Auto Insurance Brokers Work?
Insurance Brokers have relationships with many insurance carriers which grant them what is called an appointment to be able to represent and sell the insurance companies products. These products more commonly known as insurance policies can range from auto coverage, home, life and an assortment of commercial policies. These appointments with a variety of insurance carriers allows the broker to be able to shop many companies that have an appetite for your insurance business.
How do Auto Insurance Brokers get paid?
Insurance Brokers are paid based on a commission for each product that is purchased by consumers or businesses through the brokerage.
How much do Auto Insurance Brokers make?
Insurance Brokers can generally make between 8% to 15% depending on the complexity and quality of the business presented to the carrier. Higher risk or non-standard business will generally bring in a lower commission level due to the exposure, likelihood of future claims and the potential longevity of the business. Typically, commercial insurance will pay a higher commission level due to the intricacy of the policy and time involved with quoting and issuing a policy.
Auto Insurance Broker vs. Agent
There’s not a lot of difference between an insurance broker or agent other than agents generally only represent one carrier and is typically considered by contract a captive employee or agent. Agents are bound by their agreement to only sell the products offered by the company that employees them. When insurance policies come up for renewal there’s not an agent can do since they are limited by contract to offer the one product or policy. Insurance Brokers are independent “Agents” that are not bound by a contact and have the freedom to work with any insurance carrier that will give them an appointment to represent them. Brokers are agents when represents any one company but because they have the autonomy to provide their clients a variety of insurance companies.
Do Auto Insurance Brokers Charge a fee for service?
Some brokers will charge a fee for their service in addition to the commission earn by the carrier, but it must be disclosed prior to binding insurance coverage. Some of the reason a broker might charge a fee is based on the risk, complexity and longevity of the business or risk. Example would be broker working in an area of town where people only buy insurance to renew their license plate once a year. Since the brokers work on a commission and if the policy doesn’t make it past the first month the broker is doing a lot of work and receive a fraction of the commission since the policy is canceled and almost all the commission must be returned. Another example would be very large and difficult to place commercial policy which requires much time and effort trying to find a carrier that is willing to take the risk or policy. The additional staff and man power required to contact multiple carriers, submit dozens of applications generally can take days or weeks of work. But, for the normal day to day consumer most brokers will not charge any additional fees for their service.
Are Car Insurance Brokers cheaper?
It’s simply a case of large numbers: the more insurance carriers you have available more likelihood you’ll have an insurance company with an appetite for your business and willingness to provide attractive rates to earn and keep your business.
Can an Auto Insurance Broker save me anytime shopping for lower rates?
The simple answer is yes because of technology. Most insurance brokers today utilize rating software which takes the information you’d generally provide to one company and now send to dozens of carriers. These rater programs connect with the companies directly and then provide back rates based on the information provided. Shopping multiple companies as fast as entering the information in once. If you could provide your information once and let an insurance broker bring back several quotes for free, why wouldn’t you utilize their service.
How do I find an Auto Insurance Broker near me?
The easiest way is to find a car insurance broker is do a google search. Some insurance brokers like Insurance Brokers Group offer quoting in multiple states. When you deal with a brokerage like IBG you’ll find they work with many insurance companies since the have wide demographic of clients. But, if you’d prefer someone local you can always search for an auto insurance broker but include your zip code and/or city name for local brokers.
For auto and home insurance quotes click here or call 800-459-6060 to speak with a licensed broker.