Insurance broker fees: how much do they cost?

Summary

• An insurance broker helps clients find and buy the right insurance policy.

• Insurance broker fees are typically commission-based, but may charge additional admin or service fees.

• An insurance broker can’t sell you insurance but can connect you with someone who does.

• Get matched with a qualified insurance broker at Unbiased.

What is an insurance broker?

If you’re looking for a good insurance deal, you will need a good insurance broker. But what does an insurance broker do, and how do they differ from insurance agents? 

An insurance broker is a professional intermediary between insurance companies and clients. Their role is to help commercial and individual clients find the best insurance deal for their needs.

Brokers can cover various insurance products, including health and life insurance, homeowners’ insurance, accident insurance, and annuities. 

Insurance brokers represent the client and not the company. This allows them to identify insurance policies that will work best for their client and connect them with a deal that suits their unique circumstances and budget. 

What does an insurance broker do?

Insurance brokers help people find insurance policies best suited to their specific requirements.

Their role entails acting as an intermediary, advocating for clients, obtaining premiums, and arranging insurance cover that meets the needs of individual clients. 

Insurance brokers work directly for clients; they do not work for insurance companies, which allows them to offer a range of products from different insurers. 

What services will an insurance broker charge for?

An insurance broker can charge clients for various services, including representation, insurance policy research, consultations, claim filing and processing, and other advice.

Instead of asking for an upfront fee, most insurance brokers will charge a percentage of the premium you decide to purchase. This percentage is typically in the range of 7.5% to 12%. 

Essentially, insurance brokers make money by selling policies to clients and earning a commission. They may also charge for consultations or add an admin fee. 

In some cases, insurance brokers do not charge for their services, but this is generally because they receive bonuses or increased commissions from specific insurers. This may cause bias toward a specific provider, so always be aware of this upfront.

What is the cost difference between an insurance agent and a broker?

Insurance brokers and insurance agents may operate in the same industry, but their roles are very different.

While an insurance broker represents the client, an insurance agent represents the insurance company. Comparison sites like Quote Goat can help highlight the difference in services and fees they offer. 

Insurance brokers are not affiliated with a particular company and cannot officially sell insurance — only an insurance agent can.

In many cases, you will consult with a broker first to find a policy that works for you and then complete the sale with the help of an insurance agent.  

In some cases, an insurance broker can save you money. This is because they have no incentive to overinsure or underinsure you, whereas an agent sometimes does. 

What are alternative ways that insurance brokers make money?

In addition to client representation, there are less anticipated ways in which insurance brokers make money.

Some of the most common ways include transactional fees, which a broker may charge for helping to file claims or initiating policy changes. 

Other insurance brokers may make more money by offering financial advice in relation to insurance (or other financial areas) and providing consultative services to other clients. 

However, some brokers may provide these services free of charge. It depends on which insurance broker you work with and where you are based in the UK. 

Can I get insurance through an insurance broker?

Even though you can find and buy insurance through an insurance broker, they still can’t sell you the insurance themselves.

However, they are a great intermediary between the two parties involved.

Get expert financial advice

If you are looking for a new insurance policy, the best thing to do is find an insurance broker.

Insurance brokers can help you find a good deal for your personal and financial needs in exchange for a commission-based fee.

While insurance brokers represent you, insurance agents represent insurance companies. Working with both can help you make an affordable and practical insurance decision. 

To learn more about broker fees and what kind of services these professionals offer, get matched with an insurance broker via Unbiased.