Should I buy car insurance through a broker or a company?

Whether you should buy car insurance through a broker or a company depends on your needs. There are advantages and disadvantages to consider when making your choice.

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UPDATED: Jun 2, 2022

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Written By: Laura BerryReviewed By: Joel OhmanUPDATED: Jun 2, 2022Fact Checked

Here's what you need to know...

  • Insurance brokers are salespeople who work directly for you
  • A non-exclusive agent works for the insurer
  • A direct writer is an insurer that works directly with the customer

Whether you buy car insurance from an auto insurance broker or directly from the company is a personal choice that depends on more than just price.

No matter which method of obtaining insurance coverage you prefer, it’s always a smart thing to shop around and compare cheap car insurance rates from as many companies as possible.

You can’t buy from a broker online in most cases, but you can here. Enter your ZIP code above to start getting quotes right now from multiple insurance carriers. 

Should I get car insurance through a broker or a company?

This is beneficial for most car insurance buyers. You have a much better chance of finding the best deal possible for you because they are drawing on a large number of companies on your behalf.

In fact, they will be able to access certain companies that only sell through brokers or agents giving you more choice than if you contacted companies directly.

Non-exclusive agents are an excellent choice when you are looking to shop around for the best price especially if you have unusual car coverage needs or if you are considered to be a high risk.

The advantages and disadvantages of insurance brokers really depend on your unique situation this is also true regarding the disadvantages of health insurance brokers.

The major disadvantage of insurance brokers and agents is that they may have different commission schedules or even bonuses from certain companies when they sell policies— and that may influence what you are offered.

Purchasing directly from an insurer you may not save as much money as if you purchased through an agent.

Buying directly from the company typically takes longer than using an agent or broker, especially if you are shopping around, as you will have to contact various companies to get a price.

However, if you have unusual car insurance needs, you may be more successful in dealing directly with a specific company than through an agent.

There are many different types of car insurance and it’s not one size fits all. Some drivers will want very specific coverages due to their specific needs.

Whichever way you go, most states require you to have at least a minimum amount of coverage. You have to fulfill those minimums to drive without penalty.

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What are car insurance brokers?

Are insurance brokers worth it? Why use an independent insurance agent instead? Brokers are salespeople who sell coverage options for different insurers. You may not have known that you have choices when it comes to purchasing insurance, but you can buy from either a broker or the insurance company.

Naturally, there are reasons why someone would choose a car insurance broker vs. direct from the company. Some people go by price, so cheap car insurance brokers might seem like the best route instead of going through an agent or company directly. Simply because a broker can get multiple hits for coverage in one go.

Brokers offer insurance through the following process:

  • Collect your information
  • Submit it to a variety of car insurers
  • They are paid by an amount incorporated into your car insurance rates

What is the purpose of an insurance agent?

Why would someone choose an insurance agent? Are there any disadvantages of an insurance agent?

Alternatively, you can use a non-exclusive agent. Typically, he has his own office and is an independent agent for a variety of different insurance companies.

Like a broker, he will present your information to different companies and advise you on which coverage level is worth considering. 

When it comes to buying car insurance directly from a company, there are two different ways it may be handled:

  • One way is using an agent who works only for one company and is a local representative of the company. This is a good fit for those who like to deal one-on-one with their agent or those who like to deal with someone they know
  • The other option is to use a direct writer, which is simply an insurer that sells directly to the customer without involving a third party. Many direct insurance writers claim that they can offer the best prices because they keep their overhead lower.

For comparison, let’s look at car insurance rates from different companies. You can compare those rates with rates from an agent.

Average Annual Car Insurance Rate Based on Type of Coverage
CompaniesAverage Annual Car Insurance Rate for Low CoverageAverage Annual Car Insurance Rate for Medium CoverageAverage Annual Car Insurance Rate for High Coverage
American Family$3,368.49$3,544.37$3,416.40
Liberty Mutual$5,805.75$6,058.57$6,356.04
State Farm$3,055.40$3,269.80$3,454.80
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Liability coverage averages $312 a month through these companies. Compare quotes from companies with those from agents to find competitive car insurance rates.

Are auto insurance brokers cheaper?

Is it cheaper to go through a broker for car insurance? Is it better to use an agent? There are plenty of questions that people may ask when it comes to purchasing auto insurance.

That answer really depends on what you are looking for. If you need specialty insurance, you might want to go directly to a company. There are multiple types of insurance that are available for purchase. It comes down to you as an individual to discover what policy is right for you.

Brokers and agents can also charge fees that get added to your car insurance rates, making those rates go even higher. Also, it’s easier to get quotes from companies since you can mostly do that online.

What’s a broker’s salary?

Typically, a broker will make between $36,000-$120,000 a year. The numbers depend on a variety of factors, including how much they sell, where they’re located, and the clientele they work with.

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The Bottom Line

According to the Insurance Information Institute, uninsured drivers average about 13 percent of drivers on the road. States levy fines and can suspend your license if you don’t carry insurance.

Despite all the various ways you can go about getting auto coverage, there is one way that may prove to be the most efficient.

Using an online quote tool is faster and more accessible than dealing with any of the insurance professionals mentioned above.

In no time, you’ll have a variety of quotes to compare and contrast, so you can make the best decision for your car insurance needs.

Now that you know if you should buy car insurance through a broker or a company, find affordable car insurance quotes now by entering your ZIP code below.

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.

A former insurance producer, Laura understands that education is key when it comes to buying insurance. She has happily dedicated many hours to helping her clients understand how the insurance marketplace works so they can find the best car, home, and life insurance products for their needs.

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Written by Laura Berry
Former Insurance Agent Laura Berry

Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...

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Reviewed by Joel Ohman
Founder & CFP® Joel Ohman

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