What is the difference between an auto insurance company vs broker?

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Things to Remember...

  • Shopping for new auto insurance quotes from time to time is a smart idea for all drivers
  • An auto insurance broker works as a liaison to help buyers and sellers come together to execute a transaction
  • Because the broker gets quotes for you, you can benefit from saving time when working with a broker
  • You can contact auto insurance companies directly to obtain a quote

Shopping for new auto insurance quotes from time to time is a smart idea for all drivers. Auto insurance rates adjust regularly based on a number of different factors.

Because of fluctuations in these factors, many drivers may find savings on their auto insurance rates by taking the time to get a few different auto insurance quotes today.

Enter your ZIP code into our FREE car insurance comparison tool now.

If you shop and try to save on auto insurance quotes, you may discover that you can obtain quotes directly from an auto insurance company or from an auto insurance broker.

So what is the difference between a broker and an insurance company, and which one should you work with to get quotes?

What is an insurance broker?

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An auto insurance broker works in a similar fashion as a mortgage broker or other similar types of brokers. They work as a liaison to help buyers and sellers come together to execute a transaction.

In terms of auto insurance, you have the desire to buy car insurance at a lower rate today, and car insurance companies among the top ten want to sell you a policy.

A broker works to facilitate a transaction between you and the insurance company. This process involves the broker helping you to get quotes from different auto insurance companies as well as answering any questions you have about the quotes you are receiving.

The broker’s desire is to facilitate a transaction that is acceptable to both parties, and this generally involves helping you to find the lowest rates possible on your auto insurance.

After all, you likely will not be agreeable to switching insurance companies if a lower rate cannot be found.

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How Brokers Get Rate Quotes

If you make the decision to work with an auto insurance broker, you will provide the broker with many specific details about yourself, your car, and your driving history.

These are the same details you would provide to an auto insurance company if you were to get a full insurance quote. This information may include:

  • The make, model, and year of your car
  • Safety equipment in your car like an anti-theft alarm system, air bags, and more
  • Your age and gender
  • Your driving history
  • Your home and work address

The auto insurance broker then takes your information to different auto insurance companies to get quotes on your behalf. Because the broker gets quotes for you, you can benefit from saving time when working with a broker.

Without the services of a broker, you would have to provide these details to each and every insurance company you request a quote from.

The Payment of Broker Fees

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In most cases, an auto insurance broker is paid a commission from the car insurance company you decide to purchase your new insurance through. Because of this payment structure, the services of a broker are generally free to a driver.

Generally, drivers do not pay any fees at all in order to benefit from broker services. Brokers will not get paid from the insurance company unless you actually purchase insurance.

In order to accomplish this, the broker must help you find a lower rate and convince you to purchase that coverage.

With this in mind, many brokers will work very hard to find you a lower rate and to answer all of the questions you have about insurance coverage.

Other Ways to Get Rate Quotes

It is important to note that getting quotes from an insurance broker is not the only way to obtain quotes. You can contact auto insurance companies directly to obtain a quote.

While you can call a company for a quote, many car insurance companies also provide an online rate quote generation form.

You may also use a rate comparison website to get customized rate estimates. These can be used to determine which companies may offer you the lowest rate.

Based on this information, you will be able to head straight to the company that may provide you with the lowest rate rather than spend time shopping around from company to company.

Should you work with a broker?

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There is no right or wrong way to get auto insurance quotes. Working with an auto insurance broker does have its advantages.

For instance, when working with a broker, you enjoy the free services of a professional who is dedicated to helping you find an insurance policy that will save you money.

You will also benefit from having a live person who wants to answer your questions and help you make the best decision for your needs and budget.

Whereas when you get quotes directly from an insurance company, you are talking to a representative of that company who wants to sell you the policy they have to offer. They may not be looking out for your best interests.

Many people who take the time to learn about the difference between an auto insurance broker and an auto insurance company make the decision to work with a broker.

Regardless of which option you choose to obtain new auto insurance rate quotes, if you are like many other people, you may soon learn about great opportunities to save money on your car insurance policy by shopping for rates.

Start your shopping by comparing rates with your ZIP code in our FREE auto insurance comparison tool now!

FREE Auto Insurance Comparison

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