A Guide to Brokers
Searching for the right policy can often feel like looking for a needle in a haystack. Thankfully, brokers exist to help you out, dealing with the car insurance companies directly so that you don’t have to, finding the best deals on your behalf.
Find out exactly how these brokers work and whether or not it’s worth you using one to get to the Holy Grail that is a policy with extensive cover at an affordable price.
In this guide:
How do brokers work?
Brokers act like a middle man between you and the insurance companies, finding policies for you based on requirements that you give them at the start.
You let them know what you need and they’ll present you with a range of policies that they feel are appropriate and, crucially, affordable, for you.
Importantly, brokers are independent. That is, they are not tied to any particular insurance provider. And furthermore, under the British Insurance Brokers Association’s (BIBA) regulations, they are required as a matter of correct practise to put your needs and interests first, over and above either their own or those of the insurance providers. This means that, at least in principle, they are obliged to find you the best deals they can.
Additionally, if you have taken out a policy through a broker, when it comes to making a claim, they are there to fight your corner and to guide you through the whole process.
You should bear in mind that insurance brokers will charge a commission on each deal they make, so the policy you take out, while it will most likely be cheap and appropriate, will cost more than if you simply approached the company directly after, say, comparing quotes online yourself.
What are the advantages and disadvantages of using a broker?
There are of course, several pros and cons to using insurance brokers when you want to take out a policy on your vehicle. We’ll go through the most important of each now.
Simplicity vs. Cost
The simplicity of the whole process is a big advantage of using a broker. They do all the leg work for you, and because of their commitment to advancing customer interests, you can be sure that you’ll be getting a good deal from them.
However, with a broker, you do pay for this simplicity. Brokers will charge commission on each deal they make, and it is not always completely clear how much this is. Often, the commission you’re paying will simply be included in your monthly premium, and so if you don’t make the effort to find out, you could be left in the dark with regards to how much you’re paying the broker compared to how much you’re paying for the policy itself.
You should always work this out before embarking on a search with a broker so that you know from the offset how much extra you’re going to be paying.
Special Relationships – Special Deals vs. Range of Choice
Given their expertise and experience in the industry, insurance brokers will know the best ways to squeeze the most out of insurance providers when it comes to balancing the level of cover with the cost of the policy.
The experience that goes with the expertise tends to mean that each broker you find will have built up special relationships with certain providers. So while brokers are never tied to any provider in particular, they will often be able to get better deals with certain companies than you would if you went searching without them yourself.
The upshot of this though is that brokers who have built up these special relationships tend to stick with a certain, somewhat restricted range of insurers known as a ‘panel’. So while you’ll get better deals from members of the panel than you would otherwise, you may also be missing out on potentially even better deals from other insurance providers.
Brokers can be particularly helpful when it comes to specialist forms of insurance. If you want over for a classic car for example, you may have trouble getting an appropriate quote from a mainstream insurer. Some brokers will be specialised in certain kinds of less conventional insurance, and so can help you out if you have specific needs.
You can also use Money Expert’s free comparison service to compare various specialist insurance policies.
Whether you’re insuring a classic car or a sports car, if you’re after cover for a car you use for business or any number of specialist needs, give our guide to specialist insurance a read to find out how you could save on your cover.
It is important to distinguish between insurance brokers and insurance agents. Insurance agents work for a particular insurance provider and so while they will get you the best deals possible from said provider, they will not be able to offer the range you might get from a broker or, better, a comparison service like ours.
One benefit of finding a policy through an insurance agent is that they will not charge the commission that a broker would, potentially making your policy somewhat cheaper.