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Is using a car insurance broker worth it?

Find out how to pick the right broker and how a one can help you save on car insurance.

A car insurance broker is an agent who acts on your behalf to arrange and assist with car insurance. Most car insurance brokers are independent and do not work for any insurance company. Instead, they use their knowledge to shop around for car insurance deals and negotiate with insurers on your behalf.

What do car insurance brokers do?

A car insurance broker usually provides services such as:

  • Advising you on the policy that suits your circumstancessp.
  • Explaining the details such as coverage, premiums, limitations and exclusions.
  • Reviewing car insurance policies with you annually and offering advice on the latest products and add-ons available.
  • Assisting with any claims by representing you in dealings with the insurance company.

Read our guide to car insurance coverage

What’s the difference between an independent agent and a captive agent?

There are two different types of insurance brokers, and they are required to explain which category they fall into if you ask.

Independent agent.
The first type is an independent broker who helps clients out with a broad range of insurance issues, and compares options from all available providers. They could get paid directly by their clients for services rendered, but usually also earn commissions for signing clients up. They will often have a portfolio, or list, of all the different insurance companies they work with and look at options from.
Captive agent.
The second is an agent for a particular insurance company. Their services are sometimes free, but they will only find you deals and offer assistance for that one particular company. They usually get paid a commission for helping customers sign up.

What’s the benefit of using a car insurance broker?

Regardless of which category an insurance broker falls into, they can provide many benefits. They’ll be able to:

  • Use extensive knowledge of the marketplace to find deals and savings.
  • Do all the legwork for you in comparing policies.
  • Warn of insurance traps, pitfalls and legal requirements.
  • Represent you expertly when dealing with insurers.
  • Have knowledge about policies that the average person does not know about.
  • Negotiate better deals than you could alone. Due to a broker’s position in the industry, many companies extend them special offers to pass onto their clients.
  • Advise you of any discounts or exemptions you may be entitled to.
  • Remain impartial and committed to the best outcome. Insurance brokers are strictly governed by industry regulations which require them to act in your best interests and disclose any conflicts of interest they may have.

Compare free car insurance quotes online from brokers

Name Product Accident Forgiveness Min. Liability Coverage Discounts Available Online Claims Available Provinces
Surex Auto Insurance
Yes
$1,000,000
Up to 25%
Alberta, Northwest Territories, Nova Scotia, Nunavut, Ontario, Yukon
Submit one application and receive quotes from 10+ insurers. Save up to 25% on your car insurance, plus get access to an insurance advisor.

Who it might be good for: Drivers looking to use an insurance broker to compare multiple pricing and coverage options.
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Compare up to 4 providers

How much does a car insurance broker cost?

The cost of using an insurance broker depends on which kind of broker you use, and how expensive your insurance policy is. It might cost you nothing, or it might run into thousands of dollars on up.

  • The bulk of a car insurance broker’s income will typically come from commissions paid by insurers. This usually ranges from 3-20% of your premium paid. It does not directly cost you anything, as this sum is paid by the insurance company, but it might mean your broker has an incentive to direct you to more expensive policies or certain insurers that pay bigger commissions.
  • Some brokers may directly charge you a fee of a certain proportion of your premium. For example, they might charge you 10% of premiums paid, so if you are paying $1,000 annually in car insurance premiums then the broker is costing you $100 per year.
  • You may have to pay additional flat fees when you sign up for a new insurance policy, an hourly rate or flat fee for time they have spent working on your behalf such as when making a claim, an annual management fee if you are maintaining policies through them and more. They can charge fees at their own discretion, but are required to be clear and up-front about them.

How do I find a cheap car insurance broker?

A broker with more fees but no commission may be more motivated to find you a good deal in the hope that you decide the fees are worth it, while a broker with no fees but higher commission might cost you a lot less or nothing at all directly, but might steer you towards unnecessarily expensive policies.

Fortunately, car insurance brokers are required to disclose their fees and incentives if you ask. In other words, you have the freedom to pay as much or as little for a car insurance broker as you want, but should be aware of the pros and cons of working with them. If you already have an insurance broker, find out how much it’s costing you by looking at the disclosure statement they gave you.

When assessing the cost of a car insurance broker, you need to decide whether the time and money they will save you is worth the fee for their services. Just like comparing insurance policies, getting value for money rather than finding the lowest possible price should be your main goal. If you are using a broker to organize and manage all of your policies, including car insurance, then paying for their time could be money well spent.

How do I choose a broker?

A good car insurance broker should be:

  • Transparent. They should disclose all fees upfront and any affiliations or conflicts of interest they might have. They are required to inform you of these when asked, but should do so unprompted.
  • Proactive. They should be in touch with you regularly and actively working on your behalf to secure and manage your policies.
  • Empathetic. They should be open to your concerns or queries, patient while you consider your options and should never try to force a policy on you that you don’t want or aren’t sure about.
  • Knowledgeable. They should have extensive knowledge and industry experience, and have a wide range of insurers in their portfolio.
  • Recommended. Trusted recommendations from people you know who have had experience with a car insurance broker can help point you in the right direction. If you want to hear from a broker’s former customers, the broker should be happy to offer references.
  • Accessible. Some brokers advertise online, and visiting their website or social media can give you an indication of their experience, professionalism and level of customer service. There are also online car insurance broker comparison sites where you can compare the options side by side.

How can I find a cheap car insurance broker online?

If you want a local agent, you can do a local search online to find brokers near you. Look for brokers who aren’t captive agents, which means they can offer insurance from any insurer and aren’t tied to one company. You’ll get the best variety of quotes that way.

For online-only car insurance brokers, use car insurance comparison websites that offer quotes from multiple providers. You can get transparent quotes and sometimes even customize your quote to exactly what you need without ever picking up the phone.

When should I use a car insurance broker?

As with everything, there are both pros and cons to using a broker.

Pros

  • Access to a lot more insurers and options than you do. Brokers will generally find a better policy and/or better price than you would get without using one.
  • Brokers can save you a lot of time and effort.
  • They can negotiate a better deal for you.
  • A broker is better able to represent your interests.
  • They are valuable sources of information and advice.
  • Brokers can negotiate claims with the insurance company on your behalf, which can be particularly useful in tricky areas like third-party liability claims.
  • Car insurance brokers are generally recommended when insuring business vehicles, trucks and vehicle fleets, rather than private cars.

Cons

  • Brokers may charge you a fee for their services, and could cost more than you can save.
  • An insurance broker who is not truly independent could cost you more by steering you towards insurers they are affiliated with even if it’s not the best fit for your needs.
  • If you are only buying car insurance, particularly more straight forward options, like basic third-party coverage, a car insurance broker who charges a fee may not be worth your while.

How are brokers regulated?

Car insurance brokers should be licensed with your province or territory, and the regulation requirements may vary by the province or territory where you live.

Due to regulation, brokers must adhere to good practices which include:

  • Act in your best interests
  • Provide appropriate advice
  • Warn you if their advice is incomplete or inaccurate
  • Put your interests ahead of theirs when there is a conflict of interest
  • Document the advice they’ve given you about the insurance policy

Frequently asked questions about brokers

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