A home insurance broker is someone who can help you find and compare coverage options from multiple companies. While a broker can't technically sell you home insurance, they can find you a company that is willing to do so.
Local brokers are generally familiar with each company's rules and what they're willing to cover, making them a good option for homeowners with complex coverage needs.
What is a home insurance broker?
A home insurance broker is an individual or company who can match you with insurance companies based on your coverage and budget needs. If you’re looking for a home insurance broker, you can usually get a referral through your mortgage servicer, or you can shop for home insurance and compare quotes with Policygenius.
Insurance brokers vs. independent insurance agents
The main difference between a broker and an independent agent is who they represent. A broker represents the customer, while an independent agent represents an insurance company. Below are the main ways brokers and agents differ.
How do home insurance brokers make money?
Insurance brokers typically receive a commission from the insurance company after the policy is sold. Some brokers do charge clients with a brokers fee, but generally brokers make their money through commissions based on sales. Commissions vary, but they're generally a percentage of the premium cost.
In many cases, brokers may receive an additional commission if you renew your insurance plan, incentivizing them even further to make sure you’re satisfied with your coverage.
What are the main responsibilities of an insurance broker?
An insurance broker’s biggest responsibility is to help a customer compare quotes from multiple companies to make sure they are getting the right coverage at the best possible price. Insurance brokers are also expected to maintain relationships with clients, find new business, research insurance products and policies, and handle other responsibilities that come with acting as an intermediary between insurance companies and their customers.
Pros of using a broker to buy homeowners insurance
Below are some of the ways a home insurance broker can help aid the shopping process:
Brokers listen to your needs and compare multiple policies across several companies on your behalf.
You can submit your information once with them and get back multiple quotes from different companies, rather than having to input it again and again.
Home insurance brokers keep all your information on file, which could be useful if your application gets declined.
A broker can easily re-submit your application or reuse your personal info across multiple applications if you need different or more coverage.
Cons of using a broker to buy homeowners insurance
Working with a home insurance broker can save you lots of valuable time and money in the long run — but not always. Here are some things to keep in mind before you work with a broker:
Home insurance brokers are essentially salespeople, so the more expensive a policy you buy, the more commission a broker gets paid. A good broker won’t sell you more insurance than you need and will even help you avoid overpaying.
Some brokers may charge a fee for using their services.
Insurance brokers aren’t affiliated with specific companies, so they may not have access to insurance products that are sold through independent agents or directly through the insurance company.
What is the difference between an insurance carrier, an insurance agent, and an insurance broker?
An insurance carrier is the company that creates and services a policy. For example, Allstate is an insurance carrier. An insurance broker is a professional who represents insurance customers and helps them find and purchase the right coverage for their needs. An insurance agent sells insurance policies on behalf of an insurance carrier.
Insurance agents | Insurance brokers | Insurance carriers | |
|---|---|---|---|
What they do | Sells insurance policies on behalf of insurance carriers | Helps a customer choose the best insurance policy for their needs | Provides insurance coverage to their customers and pays claims |
Who they represent | Represents one or more insurance companies | Represents the consumer | Represents themselves |
How do they sell insurance | Executes policy sale completely from beginning to end | Compares quotes from multiple providers to get the best coverage and rates | Either through agents, brokers, or directly to the consumer |
How they get paid | Gets paid on commission | Gets paid a fee or commission | Customer premiums |
