If you’re in the market for a new home insurance policy, shopping around to find the right insurance company and coverage can be overwhelming. Having assistance from the right professional can help you determine what sort of coverage you need and narrow down your options to the best possible choice.
Unlike a sales agent, an insurance broker works with multiple insurance companies and can help you compare all your options, shop for policies, and find the best rates.
Here’s what you need to know about home insurance brokers and why you might want to work with one.
An insurance broker is an agent or agency that helps buyers find and purchase insurance coverage. Brokers represent the consumer rather than the insurer, so they don’t have to exclusively show coverage options from a specific company. Brokers typically earn a commission from insurance companies when their clients buy a policy.1
Insurance brokers usually have a good understanding of the different homeowners insurance policy options and can help you understand your options as well as how much home insurance you should buy.
Since brokers can compare and sell policies from multiple partner companies, they can be a valuable resource if you’re unsure what coverage you need or just want to find the best possible rates for that coverage.
A home insurance broker may not be the best choice for everyone looking for coverage, though working with one does have benefits.
For example, if you want to bundle more than one type of insurance policy with a single insurer, a broker can help you find the right insurance company and coverage options. A broker can also help break down your policy options throughout the process of buying coverage if you don’t know what you need from your property insurance.
Though many home insurance companies offer quotes online or over the phone in minutes, you may not have the bandwidth to explore and compare rates on your own. Having a dedicated broker do the rate shopping for you can be valuable.
Lastly, brokers are a great resource for filing future claims. An existing relationship with a broker allows you to ask questions and get guidance as you file with your insurance company and work through the claims process.
Many people use the terms “broker” and “agent” interchangeably because brokers and agents both work with customers to select and purchase homeowner policies. They can also both help homeowners file claims, but a few key differences do exist.
The main difference to note is that insurance brokers don’t have any restrictions on what insurance companies they can work with, but insurance agents typically do. Captive insurance agents can only sell insurance products from one specific company, while independent agents can typically sell coverage from multiple companies.2
Both brokers and agents receive payments from insurance companies; brokers earn a commission, and agents typically receive direct compensation, like a salary. Because brokers don’t work for a single company or group of insurers, they represent the customer, while insurance agents represent the insurers they work for.
Learn more about the differences between insurance brokers and agents below.
Insurance brokers can help you compare multiple policy options and then facilitate the purchase of the one you want most. They can even build a bundled homeowners insurance quote that includes multiple policies, such as renters, auto, business, and life insurance coverage. Brokers then receive payment from the insurance company in the form of commissions or a broker fee.
Customers typically don’t pay brokers, so you won’t have to pay anything extra for their services. But brokers may not be able to access certain home insurance discounts that you could get when buying directly from an insurance company (such as discounts for buying online). So, you could potentially wind up paying more for your coverage.
You have many insurance brokers to choose from, so searching for the right one for you might feel a bit overwhelming. The most important goal is to find someone you trust who is qualified to help you shop for the coverage you need.
Word of mouth is an ideal way to find brokers, so ask your friends, family, and professionals like your real estate agent to see who they trust. You can also read reviews online to make sure you’re working with a reliable and professional service.
Whoever you choose, you should always confirm their credentials, such as a valid license in your state. This will also help you to avoid ghost brokers — fraudulent brokers who offer you fake policies, often at cheaper rates than you’ll find elsewhere. The policy you “purchase” is a scam, though, and clients usually don’t learn the truth until they try (unsuccessfully) to file a claim with the company.
It’s important to consider the advantages and disadvantages of working with an insurance broker.
The following information can help answer your remaining questions about home insurance brokers and the services they offer.
It depends. If you’re struggling to find the right insurance policy at the right price, having the expertise of an industry professional can help guide you through the process. Home insurance brokers generally don’t charge customers because they earn a commission from insurance companies, though some do have a broker fee.
The 80% rule states that homeowners should insure their property for at least 80% of its total replacement cost. This ensures that you’ll have enough insurance coverage to repair or replace your dwelling and personal property in the event of a total loss.3
Working with an insurance broker, instead of buying directly from an insurance company, may limit the discounts you qualify for. While uncommon, broker fees can also add to your total cost.
At Insurify, our goal is to help customers compare insurance products and find the best policy for them. We strive to provide open, honest, and unbiased information about the insurance products and services we review. Our hard-working team of data analysts, insurance experts, insurance agents, editors and writers, has put in thousands of hours of research to create the content found on our site.
We do receive compensation when a sale or referral occurs from many of the insurance providers and marketing partners on our site. That may impact which products we display and where they appear on our site. But it does not influence our meticulously researched editorial content, what we write about, or any reviews or recommendations we may make. We do not guarantee favorable reviews or any coverage at all in exchange for compensation.
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Licensed auto and home insurance agent
3+ years experience in insurance and personal finance editing
NPN: 20564519
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