If you’ve ever owned a vehicle, the odds are pretty good that you’ve had to deal with a car insurance broker or agent.

Car insurance is required in nearly every state in the US. Which isn’t such a bad idea if you consider the fact that car accidents caused over $432 billion in property damage. They have also led to over 40,000 deaths in the US in 2016 alone.

While insurance agents and brokers may sound like virtually the same thing, they actually function differently. To make matters worse, many people confuse the two terms or just use them interchangeably.

So what’s the big difference between an insurance agent and a broker? It really all comes down to who they work for. One works independently, while the other works for a specific insurer.

Keep reading for a closer look at what makes an insurance broker different from an insurance agent.

What does a car insurance agent do?

An insurance agent typically works for one insurance company. State Farm or Allstate agents are great examples of traditional car insurance agents.

While some insurance agents may work for several insurers, most work for just one company. This means that an agent can help you choose from the policies offered by the insurer (or insurers) they work for, but nothing else.

Most insurance agents have a contractual agreement that dictates what they can and can’t sell.

What is a car insurance broker?

Insurance brokers, on the other hand, do not work directly for a specific insurance company.

Rather than just allowing an applicant to select from a few policies from one insurer, a car insurance broker works to find a policy for the applicant. Insurance brokers solicit quotes from many different insurance companies in an effort to find the best policy for the applicant.

Brokers are also usually able to obtain more specialized forms of insurance, like some forms of commercial insurance.

How insurance agents and brokers make money

Whether you’re dealing with an agent or broker, they are paid a commission by the insurance company to sell you a policy. This is simply a part of the cost when purchasing an insurance policy.

While some insurance agents are salaried by the companies they work for, it’s rare.

Which is better for you?

Whether an agent or a broker is better for you will come down to your personal needs and preferences.

Both brokers and agents act as intermediaries between you and the insurers. Both are licensed and regulated by the state they work in.

The biggest advantage that brokers have is that they allow you to choose from many different insurers, rather than just one. Car insurance brokers are also motivated to track down the best policy for you.

Putting it all together

Everyone’s needs are different. But the reality for drivers is that insurance is a necessary part of car ownership. You have to have it.

Just make sure you find the option that best fits your financial situation and lifestyle.

Contact us today for help picking the best insurance policy for you and your family.

Herndon Carr Fort Myers

10501 Six Mile Cypress Pky #101
Fort Myers, FL 33966

Herndon Carr Cape Coral

1031 Cape Coral Pkwy
Cape Coral, Florida 33904
(239) 205-6072