Auto insurance broker

Got a specialist car insurance need or just after some tailored advice? Learn the benefits of working with a car insurance broker.
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.

A car insurance broker usually provides services such as:

Advising you on the policy that suits your circumstances
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
What do car insurance brokers do?
There are two different types of insurance brokers, and they are required to explain which category they fall into if you ask.

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 usually get paid directly by their clients for services rendered, but may 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.
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.
Regardless of which category an insurance broker falls into, they can provide the following benefits:

They use extensive knowledge of the marketplace to find deals and savings
They do all the legwork for you in comparing policies
They warn of insurance traps, pitfalls and legal requirements
They can represent you expertly when dealing with insurers
They often have access to policies that the average person does not know about
They are often able to 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
They know and can advise you of any discounts or exemptions you may be entitled to
They 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
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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 all up.

The bulk of a car insurance broker’s income will typically come from commissions paid by insurers. This can range from 0-25% 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 $500 annually in car insurance premiums then the broker is costing you $50 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.
As such, 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 each. If you already have an insurance broker, find out how much it’s costing you by looking at their Statement of Advice or the Financial Services Product Disclosure Statement (PDS) that they have sent 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 organise and manage all of your policies, including car insurance, then paying for their time could be money well spent.

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How do I choose a broker?
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.
All brokers must be:

Licensed. The minimum licensing requirement for insurance brokers in Australia is an Australian Financial Services (AFS) licence. Beyond this, more highly qualified brokers may also hold Qualified Practising Insurance Broker (QPIB) or Certified Insurance Professional (CIP) certifications.
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Should I use a car insurance broker?
As with everything, there are both pros and cons to using a broker.

On the plus side:

A car insurance broker has access to a lot more insurers and options than you do. They will generally find a better policy and/or better price than you would get without using one
An insurance broker can save you a lot of time and effort
A broker can negotiate a better deal for you
A car insurance broker is better able to represent your interests
Car insurance brokers are a valuable source 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 recommended when insuring business vehicles, trucks and vehicle fleets, rather than private cars
On the downside:

A car insurance broker may charge you a fee for their services, and may cost more than you save
An insurance broker who is not truly independent may steer you towards insurers they are affiliated with, although they are required to disclose this when asked
If you are only buying car insurance, particularly more simple third party-only options, a car insurance broker who charges a fee may not be worth your while
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How are brokers regulated?
Because car insurance brokers are providing financial advice, they are subject to regulations that govern the conduct of all financial services. They must hold an Australian Financial Services (AFS) licence, or be an authorised representative of an AFS licensee. The Australian Securities & Investments Commission (ASIC) is the industry watchdog that monitors the conduct of AFS licence holders.

Brokers must also abide by the standards of the Corporations Act 2001, which require them to:

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
Provide you with a Statement of Advice (SoA) documenting the advice they have given you about the insurance policy
As a condition of their licence, brokers must also be a member of an external dispute resolution scheme and in the event of a dispute with a client, must abide by the decisions of the Financial Ombudsman Service (FOS).

Brokers who are members of the National Insurance Brokers Association (NIBA) are also required to abide by strict rules of conduct set out in the Insurance Brokers Code of Practice. In short, the rules and regulations surrounding brokers require them to always act in your best interests, and to clearly say when they might not be able to.

In the unlikely event that a conflict should arise between the insurance broker and yourself, you will always have somewhere to turn.

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How do I find a good broker?
Word of mouth: Recommendations (or otherwise) from people you know who have had experience with a car insurance broker can provide a good insight into how they operate. If you want to hear from a broker’s former customers, the broker should be happy to offer references.
Online: 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.
The National Insurance Brokers Association (NIBA): The peak body representing more than 90% of Australia’s insurance brokers has a “Need-a-Broker” service, where you can locate a registered, qualified insurance broker and NIBA member in your area.
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Brokers FAQs
Q: What do car insurance brokers do?

A: They work with their clients to help them understand their risks and how to protect their assets. They use their knowledge of the market and extensive contacts to find and negotiate the most suitable car insurance. They typically work with businesses to insure fleets, delivery vehicles, limousines and other special assets, but are also popular for everyday car insurance.
Q: Why should I use a car insurance broker?

A: They can save you a lot of time, money and stress.
Q: Does it cost more to use a car insurance broker?

A: Not necessarily. It can cost you less if a broker is able to locate and negotiate a better deal on your behalf, but might also cost you more. Remember that you’re also paying for their experience and information, so take full advantage by asking a lot of questions.
Q: What questions should I ask my car insurance broker?

A: To verify the quality of your broker, ask about their qualifications, their range of services, their experience with your type of insurance needs, how they bill for their services and whether they have references they can show you from satisfied clients. Ask for more information on any insurance details you’re not sure about.
ndependent Car Insurance brokers
Are All Insurance Agents The Same?
To get the best deal on insurance, many people consult an insurance agent or broker. But did you know that there are different kinds of insurance agents and brokers—and the one you choose can make a big difference in the type of service you get and the choices you’re offered?

Here’s the difference:

Captive agents and brokers. Captive agents work with a specific insurance company, and as part of their business agreement with that company, they can offer only that company’s insurance products. They may also be required to sell other products from that company, such as annuities and investment plans.

Independent agents and brokers. Independent agents and brokers can offer products from many insurance companies. This helps them better serve your interests, as they can review multiple options to find a policy and rate that’s right for you. Insurance rates vary from company to company. Independent agents can put together a customized insurance plan.

If you’re ready to contact an independent agent to talk about saving money on car insurance, here are a few things to consider:

Has your life situation changed recently? Many factors determine auto insurance rates, not just vehicle year, make, model, body type and engine size. If you’ve recently moved, gotten married, had a birthday or experienced a similar life milestone, mention this to an independent agent or broker. You may be eligible to save money on your car insurance.

Is your car getting older? You don’t always need the same level of physical damage coverage on older cars as on newer ones. If you drive an older car, an independent agent or broker can advise you on what level of coverage makes the most sense. Raising your deductible could save you money each year, too.

Do you have another type of vehicle that also needs cover­age? If you have a motorcycle, boat, RV or other “toy insurance,” you might save money by having it covered by the same company that insures your car. Talk to an independent agent or broker about it.

Another plus to working with an independent agent or broker is their ability to offer guidance for all your insurance needs—auto, home, life, business and more. They can customize a package of policies just for you.
What is an Auto Insurance Broker?

It is very easy to get confused as to the difference between what an auto insurance broker and an auto insurance agent does as part of their job. Ever wondered what is an insurance broker and when you might need one? Well, first off, an auto insurance broker differs from an agent in that he or she is an independent contractor and does not just write policies with one company. An auto insurance agent generally works for one company and writes policies just for customers of that firm he or she represents.

Are Auto Insurance Brokers a Good Idea?
While auto insurance brokers are pretty much required to be up to date on all of the latest regulations and training from all of the companies they represent, they generally are only allowed to sell auto insurance in one particular state. If you move around a lot, that may dictate whether or not you choose to buy insurance through a acr insurance broker or an agent affiliated with one particular company.

Many people like to use auto insurance brokers because they can shop around with all of the companies that they work with to get you the lowest rates on auto insurance. If you shop with an auto insurance agent from one company, they can still help you with getting as many qualifying discounts as possible but won’t usually cross shop other brands for you.

Auto insurance brokers’ services don’t come for free however as most auto insurance brokers do charge a fee for all of their work on your behalf. But as car insurance brokers are paid on a commission for each policy that they sell, they do often times go the extra mile to please their customers. As with any service, do some research on the auto insurance broker you are going to be working with to make sure no complaints have been filed with any state agencies or the Better Business Bureau (BBB).

Get to Know Your Car Insurance Broker
Make sure that you also spend the time to sit and talk with your auto insurance broker so he or she will best understand how to balance your financial budget with your different coverage needs. An understanding auto insurance broker should know what sort of deductible you will want for your different forms of insurance coverage and whether or not you should choose some type of collision and comprehensive auto insurance coverage.

A good auto insurance broker should be just as well trained, if not better trained, than your average auto insurance agent that just works for one specific company. Since auto insurance brokers usually work with a number of agencies, they should also know a lot about the various discounts that are available from different companies, for example, those for good drivers, good students and even for those who have served in the military or graduated from college.

If you feel like you need a little bit more of a personal touch when buying your own auto insurance, look into working with an auto insurance broker. The whole point of being a car insurance broker is to offer a level and variety of service above and beyond what your average insurance agent can provide. Since they are independent however, you will have to make sure the person you are working with has your best interests at heart. Most importantly, never be afraid to ask lots of questions when you first meet with your auto insurance broker.