What Is an Insurance Broker—and Do You Need One?

Let’s face it: talking about insurance isn’t most people’s idea of fun. Yet, it’s one of those things we all need, whether it’s for our car, home, or even our life. Despite its importance, insurance often feels complicated and time-consuming. Scott Holeman, a spokesperson for the Insurance Information Institute, notes, “Insurance is something that most of us need, but it isn’t something people like to talk about or spend a lot of time on.”

It’s no wonder many of us put off shopping for insurance. It takes time to compare quotes, understand policies, and find a reputable insurer. According to one survey, some shoppers spend 30 minutes to two hours just comparing insurance quotes. If you have significant assets like cars, real estate, or a business, finding the right policies can become especially tricky.

Here’s where insurance brokers can be a lifesaver. They do the heavy lifting for you—finding out what coverage you need, gathering quotes from different insurers, and helping you choose the best policy for the lowest price. Plus, if your circumstances change, like buying a new car or starting a new business, brokers can quickly help you update your coverage.

Ready to dive in? Let’s discuss what insurance brokers do, whether you need one, and how to find a good one.

What is an Insurance Broker and What Do They Do?

An insurance broker’s role is to make your life easier. They work with multiple insurance companies to find you the best coverage. They gather quotes, explain policy options, and even negotiate rates or discounts on your behalf. If you decide to go with a policy, a broker can guide you through the application process, helping with paperwork and liaising with the insurance company.

Once you have your policy in place, your broker can be your go-to person for any insurance-related needs. They can help you file claims, update your coverage, and even find a new policy if your premium goes up. Many brokers focus on property and casualty insurance, which covers things like car insurance, homeowners insurance, travel insurance, and business insurance. These policies help replace your car or other property if it’s damaged or stolen and cover medical expenses or repair costs if you’re liable for an accident.

Other brokers specialize in areas like life insurance, disability insurance, or long-term care insurance. If you’re not covered by an employer’s health insurance, you might work with a health insurance broker to find a suitable plan.

In today’s digital age, online brokers like Policygenius or The Zebra offer comparison shopping for various insurance policies. However, these platforms don’t always provide the personalized advice that a human broker can. As Scott Holeman points out, “A lot of younger people want to buy online and don’t want to talk to anybody in particular. It depends on what your comfort level is and what kind of touchpoint you want to have.”

Insurance Broker vs. Insurance Agent: What’s the Difference?

Insurance brokers and insurance agents might seem similar, but there’s a key difference: who they work for. Generally, brokers work for you, the consumer, while agents represent insurance companies.

Brokers are independent—they don’t work directly for any insurance company. This means they can offer you a wider range of policy options from different companies. Independent insurance agents also help you find the best policy, but they typically work with a smaller pool of insurers. Captive insurance agents, on the other hand, represent just one insurance company, limiting your choices.

As Eleanor Johnson from Highland Capital Brokerage puts it, “A broker or an independent agent has the ability to show you multiple carriers and will give you choices. That’s the bottom line.”

How Insurance Brokers Get Paid

You might be wondering, “Do I have to pay for a broker’s services?” Typically, no. Both brokers and independent agents earn commissions from insurance companies when they bring in customers. This commission is usually a flat fee or a percentage of your premium. It’s worth noting that the quotes you receive already include these commissions—so no hidden fees.

Some brokers might charge a one-time fee for their services, but that’s rare. It’s always a good idea to ask how a broker gets paid upfront, even if you’re not directly paying them. Knowing where their incentives lie can help you make informed decisions.

Do You Need an Insurance Broker?

So, do you need an insurance broker? It depends on your situation. If you have multiple insurance needs, a broker can save you a lot of time and hassle. They can help you devise a comprehensive plan to protect all your assets cost-effectively.

For example, life insurance policies vary widely based on factors like age, medical history, and lifestyle risks. Brokers can help you navigate these complexities and find a policy that fits you best. Similarly, if you need affordable car or home insurance quickly, a broker can expedite the process.

Speed is a significant advantage of using a broker. If you need to update a policy or switch carriers, a broker already has your information on file, making it easier to get new quotes and make changes.

Of course, if you prefer to do it yourself, make sure to compare quotes from at least three insurance companies to ensure you’re getting the best deal.

How to Find an Insurance Broker

Finding a reliable insurance broker is crucial. A good place to start is by asking friends or family for recommendations. You can also ask financial advisors, as they often work with trusted brokers. When evaluating an insurance broker in NYC, look for someone who pulls quotes from a variety of insurance companies and offers side-by-side comparisons.

The National Association of Insurance Commissioners provides a tool to verify a broker’s license—worth checking. And don’t forget to ask key questions, like:

  • Are you a broker, an independent agent, or a captive agent?
  • What type of insurance do you specialize in?
  • How many insurance carriers do you pull quotes from?
  • How do you get paid?
  • Do you have a fiduciary duty to act in my best interest?

These questions can help you find a broker who fits your needs and provides you with the best insurance options.

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