How to Avoid Paying a Broker’s Fee for Car Insurance

Some insurance brokers will charge you a broker fee when you purchase insurance through them. Here's how to avoid paying a broker fee for your car insurance.
Written by Jason Unrau
Edited by Amy Bobinger
Reviewed by Jessica Barrett
Insurance brokers profit by collecting commissions on the policies they sell to their customers. In some cases, they also charge additional fees to consumers, called insurance broker fees.
  • Insurance brokers help consumers find affordable auto insurance coverage—but they usually charge fees amounting to about 5–8% of your policy cost.
  • You can avoid paying a broker fee by purchasing an auto insurance policy directly from an insurance company, using an independent agent, or shopping with
    an insurance comparison app
  • Broker fees will be listed separately on your policy, so you don’t have to worry about a hidden charge.

Why car insurance brokers charge an extra fee

A brokerage helps buyers find the right
car insurance
policy for their needs at the most competitive price.
Understanding the fees: When a broker pairs you with an insurer, they collect commissions from the insurance company for their work—usually 5–8% of the total insurance premium. They’ll get this fee when the policy is sold and again anytime it renews. They also might charge you an additional fee for their services to increase their profit.

Is an auto insurance broker ever worth it? 

Sometimes, yes! If you have a specialty vehicle or especially high premiums and you have trouble finding affordable—or available—policy options, a broker may be able to help you find lower auto insurance rates than you could find on your own.

How to avoid extra car insurance broker’s fees

If you do your due diligence when shopping around for brokers and auto insurance companies, you should easily be able to avoid broker fees. Here's how:

Buy your policy directly from the insurer

If you know exactly what type of coverage you want on an insurance policy and have done comparison price shopping on your own, you don’t have to use a broker to save money. 
Instead, you can purchase car insurance directly from the insurance provider, saving any middleman charges and broker’s fees.

Buy your insurance from a captive agent or an independent agent

If you want to deal with someone who can lend their expertise to your situation without paying extra fees, an insurance agent is a great choice. They’ll help you understand the different types of insurance that would best fit your situation, but they won’t charge a brokerage fee.
What does it mean? A captive agent is someone who works for (and represents) the insurer, while an independent insurance agent might work with multiple carriers and makes their profit solely through commission. Either way, they’ll help you meet your insurance needs without the extra broker fee.

Check your paperwork for broker’s fees

In order to avoid paying a broker’s fee, you have to be aware that you’re being charged. Fortunately, in the United States, this will be made clear when you purchase your policy.
Stay informed: Across the US, brokers must disclose upfront if they’re charging fees to the end user. Not only must it be clearly stated, but you’ll also be required to sign a
broker fee agreement before paying any fees

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