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A guide to car insurance brokers

A guide to car insurance brokers

Finding the right car insurance can sometimes be a hassle, particularly if you need a specialist policy or have non-standard requirements.

That’s when the services of an expert broker could be useful. Here’s what you need to know about using a car insurance broker.

Daniel Hutson
From the Motor team
minute read
posted 24 MARCH 2020

What is a car insurance broker?

A car insurance broker acts as a ‘middle man’ between you and prospective insurance providers, to find a car insurance policy based on your needs and requirements.

Brokers work independently. They aren’t tied to any particular insurance provider, which means they should be impartial and always put your interests first.

If you buy your policy through a broker, they’ll also be able to assist you in the event of a claim. They can negotiate on your behalf and hopefully make the whole process more straightforward.

How are brokers regulated?

As car insurance brokers provide financial services, they must be authorised by the UK Financial Conduct Authority (FCA) and listed on the Financial Services Register.

They’re also governed by the British Insurance Brokers’ Association (BIBA). Regulated brokers are expected to follow the BIBA Code of Conduct, which says that they should always act:

  • with integrity and honesty
  • in the best interests of each client
  • with skill, care and diligence

What’s the difference between a broker and an agent?

There’s an important difference between a car insurance broker and a car insurance agent.

Brokers are independent and will compare a wide range of insurance providers, to get their clients the best deal they can find for their requirements.

An agent works for one particular insurance provider. As they represent the company they work for, they’ll only search for deals provided by that insurance provider.

Some agents don’t charge a fee for their services. But brokers will charge a commission, which is usually added to the cost of your premium.

What are the advantages of using a broker?

There are some advantages to buying your car insurance through a broker:

  • They have access to a wide range of policies and insurance providers.
  • In trying to find a good deal, they’ll do all the hard work for you.
  • They have experience, expertise and in-depth knowledge of the insurance industry.
  • They can help you with specialist insurance that might be harder to find on your own.
  • If you have to claim, they’ll negotiate for you and put your interests first.

What are the disadvantages of using a broker?

These are some of the disadvantages of using a broker:

  • You’ll most likely be charged a service fee and commission, which could end up costing you more than you save.
  • It can be tricky to work out how expensive or cheap car insurance brokers are, since their commission is often included in your monthly car insurance premium.
  • Some brokers may work from a limited list of insurance providers, which could mean you’re losing out on a better deal elsewhere.

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