Insurance brokers and insurance agents are often mentioned together, and in everyday conversation the terms are used loosely. Legally and practically, though, there are differences that affect who the professional works for and how they are paid. This guide explains what insurance broker services include and when using a broker makes sense.
A broker generally represents you, the buyer, and searches the market on your behalf.
Brokers are most useful for complex needs: businesses, high-value homes and hard-to-place risks.
Brokers may be paid by commission, fees or both; ask for this in writing.
Broker vs. agent: the main difference
An agent is appointed by one or more insurance companies and acts on their behalf when selling policies. A broker typically acts on behalf of the customer, approaching several insurers to find suitable coverage. The exact legal definitions differ by state, and many professionals are licensed as both. For personal auto and home insurance, an independent agent often provides a very similar service.
What insurance broker services include
Risk review
A broker looks at what you need to protect, such as property, income, vehicles, employees or professional liability, and identifies gaps.
Market search
Brokers approach multiple insurers, including specialty and excess-and-surplus-lines carriers that accept unusual or higher risks.
Negotiation
For larger or business policies, brokers can negotiate terms, limits and sometimes price.
Policy review and renewal
They check policy wording, compare options at renewal and update coverage as your situation changes.
Claims advocacy
Brokers can help prepare and present claims and push for fair handling.
When a broker is worth it
You own a business and need general liability, property, workers’ compensation or professional liability insurance
You have a high-value home, collections or multiple properties
You have been declined by standard insurers
You need specialty coverage, such as for events, contractors or short-term rentals
For a typical household buying car and home insurance, an independent agent is usually enough.
How brokers are paid
Brokers may receive a commission from the insurer, charge you a broker fee, or both, depending on state law and the type of policy. Any fee should be disclosed before you buy. Ask the broker to explain their compensation clearly.
Choosing a broker
Confirm they hold a broker or producer license in your state.
Ask about experience with clients similar to you or your industry.
Request references and check reviews.
Get proposals in writing and compare coverage, not just price.
