Mathew B. Sims is Editor-in-Chief and has authored, edited, and contributed to several books. He has been working in the insurance industry ensuring content is accurate for consumers who are searching for the best policies and rates. He has also been featured on sites like UpJourney.

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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 (BBB A+). 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 and Safeco. He reviews content, ensuring that exis...

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Aug 28, 2020

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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.

Things to Remember...

  • Shopping for new auto insurance quotes from time to time is a smart idea for all drivers
  • The difference between an insurance company and broker is that an auto insurance broker works as a liaison to help buyers and sellers come together to execute a transaction
  • Because the broker gets car insurance 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

What is the difference between an insurance company and a broker? The biggest difference is that an insurance company sells directly to the client, while a broker auto insurance company works with companies to find clients and sell them insurance.

Regardless of which method you use, car insurance rates adjust regularly based on a number of different factors. Because of fluctuations in these factors, many drivers may find cheap auto insurance rates by taking the time to get a few different auto insurance quotes today.

Regardless of whether you are debating using a insurance broker vs insurance company, entering your ZIP code into our free auto insurance comparison tool will help you find savings. Buy cheap car insurance now.

Want to learn more about what is the difference between an auto insurance company vs broker? Read on.

Insurance Company vs Broker

If you shop and try to save on auto insurance quotes, you may discover that you can obtain quotes directly from a car insurance company or from an auto insurance broker. While they may seem similar, insurance companies are not brokers.

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

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 auto insurance at a lower rate today, and auto 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 the auto insurance broker quotes involve 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.

However, the National Association of Insurance Commissioners (NAIC) cautions shoppers to make sure that their agent, broker, or company is licensed to sell. Fraud can be all to common when it comes to selling insurance.

How can I know to trust an affordable auto insurance broker or company? Shoppers should check credentials and complaints to make sure their chosen company or broker is reputable.

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How do 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, as these are the factors that affect auto insurance rates. 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.

To give you an idea of how one of the above factors (age and gender) can drastically change your rates, we’ve included rate data from Quadrant below.

Auto Insurance Rates by Age and Gender
Auto Insurance Rates by Age and Gender Single 17-year-old femaleSingle 17-year-old maleSingle 25-year-old femaleSingle 25-year-old maleMarried 35-year-old femaleMarried 35-year-old maleMarried 60-year-old femaleMarried 60-year-old maleAverage Rate
American Family$5,996.50$8,130.50$2,288.65$2,694.72$2,202.70$2,224.31$1,992.92$2,014.38$3,443.09
Liberty Mutual$11,621.01$13,718.69$3,959.67$4,503.13$3,802.77$3,856.84$3,445.00$3,680.53$6,073.46
State Farm$5,953.88$7,324.34$2,335.96$2,554.56$2,081.72$2,081.72$1,873.89$1,873.89$3,260.00
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As you can see, rates are drastically different among companies. Without the services of a broker, you would have to sort and compare each and every insurance company’s rates you request a quote from.

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Enter your ZIP code below to view companies that have cheap auto insurance rates.

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What are broker fees?

What is the auto insurance broker fee? In most cases, an auto insurance broker is paid a commission from the auto 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.

Should you work with a broker or insurance company?

There is no right or wrong way to get auto insurance quotes. Working with an auto insurance broker does have its advantages. Most drivers want to know do insurance brokers save you money.

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. So when you compare an auto insurance broker vs an agent of a company, the agent 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 after weighing the pros and cons of insurance brokers.

Free Auto Insurance Comparison

Enter your ZIP code below to view companies that have cheap auto insurance rates.

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Other Ways to Get Rate Quotes

It is important to note that getting auto insurance broker online quotes 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 auto 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.

Regardless of which option you choose to obtain new auto insurance rate quotes, an insurance broker or company, start comparing rates with your ZIP code in our free auto insurance comparison tool now and find affordable car insurance near you.