If you’re shopping for homeowners insurance, auto insurance, life insurance or another type of policy, you’ll probably notice there are a ton of options out there. Narrowing down which insurer and coverage levels are suitable for your situation can be tricky without help. After all, there are hundreds of insurance companies, and your coverage needs will likely vary depending on your situation. The right insurance broker can make it much easier to find the right policy. To help figure out your insurance needs, consider finding a financial advisor.
What Is an Insurance Broker?
An insurance broker is a professional who can help you shop for coverage. Brokers don’t typically work for one insurance company, meaning they likely won’t have a vested interest in selling a particular policy like some insurance agents. Instead, brokers represent their customers and work to find the best policies for their needs.
If you’re looking for a new policy, working with an insurance broker may help simplify the research process. They can compare different options on your behalf, choosing several policy options that might work well for your situation. Then, they present the policies to you, and you work together to choose the best insurance coverage.
How Do Insurance Brokers Make Make Money?
Insurance brokers typically make money in two ways, either through earning commissions or collecting a broker fee—sometimes both. Brokers may earn a commission from insurance companies when they sell you a new policy. This commission essentially acts as a bonus from the insurer to the broker for bringing them new business. Typically, the commission a broker earns is a percentage of the policy’s total annual premiums.
Certain insurance brokers may also charge fees, which vary by state but are typically relatively small. These fees can be