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An insurance broker can help you navigate shopping for insurance if you’re not sure what you need for coverage.
The broker can help you determine your coverage needs and track down insurance quotes for you. This can be especially helpful if you’re not comfortable with insurance shopping and industry terms.
What Is an Insurance Broker?
An insurance broker is someone who works as a middle person to sell insurance from multiple companies for different types of insurance, including car, life, home and health insurance. They can get quotes for coverage and help you make a wise insurance decision.
If you feel uncomfortable shopping for insurance or are unsure about what to buy, you may want to work with an insurance broker. Here are some instances when an insurance broker may work for you:
- You don’t want to spend time collecting insurance quotes.
- You want a broker’s insurance expertise to guide you through the process and teach you about insurance policy terms and limits.
- You want to buy health insurance through the Affordable Care Act marketplace but you’re not familiar with the ins and outs of health insurance.
- You’re not sure what you need for coverage and want to avoid being underinsured. For instance, not having enough home insurance can mean you might not be able to rebuild your home if it’s destroyed.
- You’re a business owner and need business insurance.
- You have more complex car insurance needs, such as owning a classic car collection.
Related: Insurance for a Classic Car
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How Do I Get an Insurance Broker?
There are multiple ways to get an insurance broker, which can vary by the type of insurance. Here are some ways:
- You can contact an insurance company or search online for brokers that offer that insurance company’s policies.
- Contact the National Association of Health Underwriters or a state group that can connect you to a broker. For instance, California residents can visit the Independent Insurance Agents & Brokers of California website to search for local brokers.
- If you’re looking for health insurance through the ACA health insurance marketplace, you can visit healthcare.gov’s Find Assistance program. The page lets you search a directory for brokers, agents and government-funded enrollment assistants.
- Talk to people you trust, such as friends and family to see if they’ve used brokers.
You can contact the broker and see if the professional is a good fit. You’ll want to find someone who is licensed in your state with experience in the type of insurance you need.
Talk to the person and see if they communicate in easy-to-understand language. Ensure that they’re open to working with you to find the right coverage for you and they’re someone who will objectively tell you the pros and cons of different insurance policies.
How Do Insurance Brokers Get Paid?
Insurance brokers get paid either through commissions or fees. Commissions come from the insurance company, while fees may come out of your pocket.
Insurance Broker Commissions
An insurance company generally offers a commission to a broker when the professional sells a policy. The commission is a percentage of the policy’s cost and can vary by insurance company and state. The cost is not passed onto you.
You usually pay the same price for coverage whether you go through a broker or buy a policy on your own. Though you don’t save money going with a broker, the person can track down quotes and answer insurance-related questions.
Insurance Broker Fees
A broker may charge a fee but the amount depends on the broker, insurance type and state. The broker should also be upfront about any potential fees, such as new business or policy renewals.
What’s the Difference Between an Insurance Broker and an Independent Insurance Agent?
The difference between a broker and an agent is that an insurance broker works for you while an insurance agent usually works on behalf of an insurance company.
They sound similar, may hold the same licenses and perform similar duties, such as helping you buy insurance. An agent’s primary role is to get business for the insurance company, while a broker should place your insurance needs first.
There are two types of insurance agents: Captive agents and independent agents.
Do I Need an Insurance Broker?
Whether you need an insurance broker depends on how comfortable you are with the insurance you’re buying and if you would prefer having a professional track down quotes and answer your questions.
Brokers can also help make sure that you’re not underinsured. In other words, you have the right insurance at the right amount to properly cover you. They can also help you avoid buying more insurance than you actually need.
