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What Is an Auto Insurance Broker?

Fact-checked with HomeInsurance.com

An auto insurance broker can quickly and efficiently compare policies across the auto insurance market. Independent, they’re not aligned with any one company. Because of this, they can accomplish what would take you hours (if not days) in a few moments.

Should you work with one? What are your other options? Keep reading to find out.

What is an auto insurance broker?

An auto insurance broker helps shoppers compare quotes and coverage options from many insurance companies. The broker answers questions, explains policies and helps shoppers choose the best provider

Some agents called captive agents work exclusively with one insurance company, and independent agents partner with a lot of companies. This essentially gives them a bird’s eye view of the insurance field, which allows them to steer shoppers to providers whom they think are the best fit for them.

What do car insurance brokers do? 

A car insurance broker can be helpful when buying insurance. This is because a broker will:

  • Help you compare rates
  • Help you compare policies
  • Explain the differences between policies
  • Explain exclusions within policies
  • Help you decide how much coverage you need
  • Help you decide whether or not to purchase any ride-ons or endorsements to supplement a policy

When you purchase auto insurance, you need to consider your state’s minimum liability requirements and things like underinsured/uninsured auto insurance. 

If your state has a high percentage of uninsured motorists, consider purchasing uninsured motorist protection. You could always sue, but if your losses are severe, the driver may not have the resources to pay you.

Likewise, if your state has a low liability requirement, the at-fault driver’s insurance may not cover all of your medical expenses and repair costs. In this case, you would want to consider underinsured motorist protection.

What if you are at fault? At fault drivers have medical expenses and repair costs too. For this, you will want collision insurance.

However, do you own a new car? If you’re in an accident, will the insurance company cover the entire cost of your loan? Should you consider gap insurance?

A broker can help you answer all of these questions and more while helping you find the best company to suit your budget.

After talking with a broker, you may not be done when you leave. A broker will help you with most of the steps, but you’ll have to make the final step of signing up for a policy yourself.

Are car insurance brokers expensive?

Most of the time, brokers don’t cost auto insurance shoppers anything. Instead, insurance companies give the broker a commission. You may get charged a service fee, but this is regulated by your state. 

For the most part, brokers are paid a percentage of the premium they sign shoppers up with, but they may also charge shoppers a small fee.

Do I need an auto insurance broker?

You don’t need an auto insurance broker to choose the best policy for your needs and budget. However, if you’re new to the world of insurance and insurance jargon, consider finding one. You can Google things all day long until you have a solid understanding of a policy, but at the end of the day, you don’t know what you don’t know. For many people with day jobs, a broker makes things a lot easier.

However, as with anything, there are pros and cons to working with a broker.


  • They are adept at explaining policies to auto insurance shoppers.
  • They have access to multiple companies if you use an independent agent.
  • They can help you narrow down what you need.
  • They can explain the subtle differences between competing companies.


  • Although brokers have access to multiple companies, they don’t have access to all companies. For this reason, it may sometimes be in your best interest to work with a captive agent.
  • It’s not in the broker’s best interest to sign you up with the cheapest policy because they make money off commissions.
  • Brokers don’t always have access to every policy a company offers.
  • A broker might only be licensed in one state, so if you move or own cars in another state, you may have difficulty getting the best coverage.

How to buy auto insurance without a broker

If you don’t use a broker, you have two options: direct auto insurance (aka shop online) or use a captive agent. 

Captive agents

Providers like State Farm and Allstate have a lot of offices throughout the country. These offices are filled with captive agents who work one-on-one with policyholders. A captive agent is a great option if you want to work with the same person whenever you need help. 

Captive agents are knowledgeable enough to walk you through different policy options and can help you juggle multiple policies such as home, car and boat insurance. 

The downside to a captive agent is that he or she can’t steer you to a better company, and, as with a broker, there’s no incentive for them to steer you to a cheaper policy. They make all of their money off of commission.

Direct auto insurance 

With direct auto insurance, everything is done at home as you see fit. No agent or broker tries to convince you that you need a certain policy or coverage option over another more expensive one. 

The downside is that you have to know what you’re doing and understand what you need. Nationwide insurance companies have great online websites to walk you through everything, but if you’ve never signed up for insurance before, you may still feel lost.

To compare policies, you’ll need to understand your state’s auto insurance requirements and the differences between coverage options. These include:

Ask yourself the following questions:

  • Do any perks come with a particular policy?
  • How much does it cost to add roadside assistance?
  • What discounts does a company offer? Are they easy to achieve? 
  • How much will you save if you bundle your home/renters insurance policy with an auto policy? 

Ask multiple providers all of these questions.

To apply for a policy online using the direct auto insurance method, you’ll need the following information readily available:

  • Your full legal name
  • Your date of birth
  • Your social security number
  • Your driver’s license number
  • Your current provider and coverage if applicable
  • Your driving history
  • Make, model and vehicle identification number

If multiple people are going to be on your policy, you’ll need their information too.

The takeaway

There are a lot of ways to sign up for insurance. Brokers are a useful tool to consider.

  • Brokers have access to multiple companies’ data.
  • They can quickly help you navigate between policies and coverage options.
  • There’s no incentive for a broker to steer you towards a better, cheaper policy.

Whether you should use a broker depends on your comfort level with insurance. If you’re starting out and don’t know what you need, a broker may be a good option. Just don’t expect to walk away with the cheapest policy on the market.

Lauren Ward

Lauren Ward is a writer for Coverage.com. She specializes in all things personal finance, including insurance, loans, and real estate.

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