Published in July 28, 2021

What is a Car Insurance Broker?

What is a Car Insurance Broker?
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A car insurance broker helps users determine which policies suit them best, and arrange and assist with their car policy.

Purchasing a car insurance policy can be overwhelming. You’d have to determine which coverage would suit you best, how high you’d need to set your limits and deductible, and whether you’d want additional coverage. This is when a car insurance broker can be helpful in assisting your decisions. Car insurance brokers are agents who work on behalf of multiple insurance providers to assist users with comparing and choosing the right policies.

It’s not necessary to utilise an insurance broker, however, it does make the comparing and decision-making process more convenient. Additionally, car insurance brokers can assist you in understanding what your policy necessitates, including what components are involved and how much coverage is included.

What does it cost to use a broker?

Generally using a broker to compare quotes and purchase a policy doesn’t cost you anything; However, some brokers may charge you a service fee.

It’s always helpful to discuss any fees with your broker prior to conducting their services.

Who pays a car insurance broker?

The majority of car insurance brokers get paid a percentage of insurance premiums, also known as commission. Considering the commission is within your premium costs, utilising a broker doesn’t come at an extra cost.

Regardless of which provider you pick, the broker works with multiple insurance providers, therefore they have no financial incentive to push you towards a specific carrier. This is why you should trust insurance brokers to help you determine the best policy to suit your needs and goals.

Why go through a car insurance broker?

Think of a car insurance broker as your personal shopper. They have an understanding of your needs and have the resources to get it for you as quickly and simply as possible. That process saves you the time of understanding all the different policies, comparing different providers and doing a lot of research.

Car insurance brokers will have all your information and goals on hand. That means they’ll know which providers are more likely to insure you. Do you have bad credit? That’s okay, insurance brokers will provide you with a range of carriers that serve people with bad credit.

The same applies to poor driving history or if you’re still on your provisional license. Without a broker, the process of understanding your rates and comparing policies might be much longer.

A broker’s service doesn’t just end at helping you compare policies. They can also help you understand the application process and aid you with submitting the right documents. Additionally, brokers can help determine which coverage best suits your particular situation. You could also be aided with adding additional coverage. Coverage includes components beyond the baseline that can increase your financial protection.

Plan a thorough budget with Moneysmart to understand your spending habits and how much you can afford for your monthly payments.

How to find car insurance without a broker

It’s not necessary to use a car insurance broker. You can directly go to your desired insurance company or their website and apply for your chosen policy.

If you choose to independently find your own car insurance policy, you would need to apply to multiple different carriers and compare their coverage options and rates. Make sure you’re comparing policies with the same lengths and deductible amounts. That’s because some policies may seem cheaper than others due to decreased components.

It’s always helpful to compare insurance companies online and checking their metric scores to understand their claims and customer satisfaction. Even if an insurance company offers a really cheap quote, they could be known for denying claims and delaying pay-outs.

Independent brokers typically thoroughly know about the reputations of different carriers, therefore you’ll be guided towards higher rates of claims satisfaction. However, you may not need an independent car insurance broker. If you have a documented record of safe driving, you’d already been eligible for the best rates at any car insurance company.

While we at Tippla will always do our best to provide you with the information you need to financially thrive, it’s important to note that we’re not debt counsellors, nor do we provide financial advice. Be sure to speak to your financial services professional before making any decisions.

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