Car insurance brokers

Before there were price comparison sites, the best (and arguably only) way to compare multiple insurers in one fell swoop was to use an insurance broker. These days, price comparison sites have become most people’s first point of call. But if your car insurance needs are complex or you’re insuring a classic, high-powered or unusual car, it could still be worth calling on the specialist expertise of a car insurance broker.

What is a car insurance broker?

A car insurance broker is an insurance specialist that acts as a middle man between you and insurance companies. Sometimes they’ll be part of a larger firm of insurance brokers. As regulated financial experts, brokers can help you decided what kind of insurance and what level of cover you need. A broker can then search on your behalf for the best car insurance deal, across a range of insurers.

How do car insurance brokers work?

Car insurance brokers work independently of the insurers whose products they recommend. Unlike insurance agents, they’re not tied to a particular insurer.

Some insurance brokers cover the whole of the available car insurance market, whereas others may work with a smaller, select panel of providers. It’s worth checking this before you use a broker.

Insurance brokers must be regulated and authorised by the Financial Conduct Authority (FCA). They earn their living through the commission they’re paid by insurers when you take out a product on the broker’s recommendation. However, their recommendations should always be based on your individual needs, and not how much money they might make.

Many insurance brokers are members of the British Insurance Brokers’ Association (BIBA), which has a voluntary code of conduct for its members. This states that BIBA members should:

1. Abide by all relevant laws, principles and regulations
2. Act with integrity and honesty
3. Act in the best interests of each client
4. Act with skill, care and diligence.

What is BIBA?

The British Insurance Brokers’ Association (BIBA) is a professional body representing the interests of insurance brokers, intermediaries and their customers.

As well as supporting its members (insurance brokers), it has published a code of conduct that outlines the ways in which it expects its members to behave.

It also has a searchable directory of its members, to help you identify the right broker for your needs.

What kinds of driver might particularly benefit from using a car insurance broker?

There are a number of risk factors that might mean you find it difficult to get reasonably priced cover via a price comparison site. Risk factors that could make it worth trying a specialist broker include:

• You’re a younger (under 20) or older (80+) driver. There’s evidence that drivers in both of these age brackets can make more, or more expensive, claims. As such, some mainstream insurance policies may not cover them.
• You drive a classic or unusual car. Many brokers specialise in insuring cars which are less commonly seen on UK roads, such as classics, or imports from overseas.
• Your car is a high-performance or modified model. Insurers often lump drivers of such cars into a “high-risk” bracket by default. A broker may be more able to take mitigating factors into account.
• You use your car for business. Most mainstream insurance policies won’t cover any business use beyond commuting to and from a regular place of work.
• You have driving convictions. 3 points on your licence from a minor offence may not limit you too much, but any more than that and you may struggle to secure affordable insurance via a price comparison site.

How can I find a car insurance broker?

You can find a car insurance broker to suit your needs in a few ways. One way is simply to use a search engine to find a suitable broker for your needs. For example, a search for “car insurance broker young driver” show results for, unsurprisingly, brokers that specialise in cover for young drivers.

The downside of this approach is that the results you see may be ranked by the insurers that are best at search engine optimisation, rather than those that are necessarily best for your needs. Plus, while the vast majority of brokers are legitimate, there’s a chance that a rogue, unregulated company may sneak into the search results. You can double check if a broker is regulated on the FCA’s Financial Services Register.

A good alternative is to use BIBA’s search service. You have two options:

• Use its online directory. Its search functions let you narrow down the results to brokers within your local area, or those that specialise in certain risks. Drivers over 75, or drivers with motoring convictions for example.
• Call 0370 950 1790, to speak to a BIBA expert that can help you find the right broker for your specific needs.

How are brokers different to insurance comparison sites?

At first glance, brokers and insurance comparison sites might seem like they are doing the same thing. After all, both claim to compare insurance policies to help you find the best deal.

But how they approach this is a bit different.

Price comparison sites are a quick and easy way of comparing deals from hundreds of insurers online. And they tend to cover most insurers on the market (with the exception of those that choose not to appear on comparison sites). If your car insurance needs are pretty straightforward, they’re a good way to quickly scan the market.

However, the policies on offer via price comparison sites tend to be standardised policies. Remember being asked to tick a box to confirm the range of assumptions a comparison site has made about you? That’s because, in order to offer a simple service, price comparison sites rely on you meeting certain, generic criteria. If your circumstances aren’t quite “standard” (for example, you’re still putting in the miles aged 100+, or you need to use your car for business purposes), you might find it difficult to get a suitable, reasonably price policy on a price comparison site.

Brokers tend to offer a more bespoke service. Often, you’ll need to speak with them on the phone or in person, rather than filling in a generic form online. Brokers may work with fewer insurers than a price comparison site, so it’s worth checking the details of their insurer panel before using them. But they can cater to more specialist needs, and the insurers they do work with may offer lower prices via the broker than you can get elsewhere. So, if your car insurance needs are a bit unusual, a broker could be a better bet than a price comparison site.

What are the key advantages of using a car insurance broker?

There are a few key advantages to using a car insurance broker.

Specialist expertise

Brokers have the knowledge and experience to offer guidance on the right products and level of cover for your needs. If you have any questions, they’ll be in a good position to answer them.

Policies tailored to your exact needs

A broker will ask you about your personal circumstances to find you the right policy. They’ll know the right insurers to go to for your specific risk profile. They may also have access to policies that aren’t available via a price comparison site. Brokers can sometimes also be more flexible on policy features and price than comparison sites.

Brokers can help with making a claim

If you need to make a claim, your broker might be able to speak to loss adjusters and claims departments on your behalf. They’ll know the steps to follow to minimise the risk of your claim being rejected, and can take some of the hassle away at a stressful time.

What are the disadvantages of using a car insurance broker?

While using a broker can have a number of advantages, there are a few potential downsides. They include:

A more limited range of insurers

Many brokers use a panel of insurers, rather than covering the whole of the market. So there’s a chance you may never be told about some good options. Plus, some insurers opt never to make their products available through brokers (or indeed comparison sites). So to get a complete picture of your insurance options you may need to check several brokers and still go to some insurers directly.

Commission charges can (sometimes) bump up the premium

A broker’s commission will be included in the premium you’re quoted, which in some cases may increase the quote compared with going direct. However, this may be offset by the broker getting a preferential deal from the insurer. To be sure, you could also get a quote directly from the insurer recommended by the broker. Just make sure you are comparing like with like.

You might not need to use a broker

If your needs are straightforward, you can probably get a decent deal online via a price comparison site.

Can I compare car insurance brokers?

You may find a very small smattering of car insurance brokers that choose to feature on price comparison sites. But it’s not always easy to tell brokers from actual insurance companies. And the products shown on price comparison sites are unlikely to include more bespoke policies.

Plus, because they tend to focus on less standardised insurance, the majority of car insurance brokers won’t be on price comparison sites. Instead, you typically have to call or email them directly.

So, in short, there’s no quick and easy way of comparing all of the car insurance brokers on the market at once. Your best bet might be to select around 3 brokers that look like they cater to your circumstances, and get quotes from each of them.

Pros and cons of using a car insurance broker

Bottom line

If your car insurance requirements are straightforward and you know the type of cover you need, a price comparison site is a great way to scan the market and secure the right cover at the best price. But the standardised policies available via price comparison sites sometimes don’t cater as well to unusual risk factors. If you drive a classic, high-end or particularly powerful car, or your personal circumstances make you a higher-risk driver, the expertise of a car insurance broker could help you get a better deal.

Frequently asked questions

• What is the difference between an insurer and an insurance broker?

  An insurer sells insurance policies. They are responsible for setting the levels of cover, what is and isn’t included in a policy, and for dealing with any claims you may make. An insurance broker acts as a middle man between customers and insurers, analysing a range of policies from different insurers to find the right one for you. While your payment goes to the broker, and your policy may even have the broker’s brand on it, the insurance itself will be provided by the insurer that the broker has recommended for you.

• Can a broker find me cheaper car insurance?

  In some cases, yes. Particularly if your needs are complex, or you have an unusual car, as brokers are often able to find non-standard insurance deals to suit non-standard needs. Price comparison sites, on the other hand, tend to rely on a number of assumptions and display only more standardised policies.

• How do insurance brokers get cheap quotes?

  Because insurers get a lot of their business through insurance brokers, in some cases they may offer preferential deals. This means you may sometimes get a better price going through a broker than if you went to the insurer directly.

• How do insurance brokers make money?

  When a customer takes out an insurance policy following a referral by a broker, the broker will receive commission from the insurer. This is typically how brokers make money. The commission amount will usually be added into the premium you pay to the broker. It will pass on the premium to the insurer with their commission deducted. Price comparison sites work in a similar way, by deducting a small amount of commission from the premium you pay when you take out a policy via the site.

• Are car insurance brokers regulated?

  Yes. Legitimate car insurance brokers must be authorised and regulated by the Financial Conduct Authority. This means that they must adhere to certain rules and standards.

• What's a ghost broker?

  A ghost broker is a fraudulent individual or firm that claims to offer cheap car insurance deals. However, if you need to make a claim, you’ll discover that the cover was fake and you are unprotected. You can make sure an insurance broker is genuine by using one from BIBA’s broker directory. You can also check a broker’s authorisation status on the FCA’s Financial Services Register.