Insurance brokers act as matchmakers between people wanting insurance and insurance companies. Brokers are also there to help with making claims or dealing with any problems a customer may have with an insurance company. They do not work for any insurance company. Their clients are the people that need insurance. This is often a free service. If it is a free service, then how does an auto insurance broker make money? Here is the answer from Blue Lion Insurance Brokers.
Insurance Companies Pay Them
Although they do not work for a particular insurance company, insurance brokers still get paid by any insurance company that sends new business their way.
This is not a salary but a commission. It tends to be larger if the broker sends a new client than someone who is renewing a policy or making a change to an existing policy. Some insurance companies pay higher commissions than others.
Charging Fees
Not all insurance brokers work for free. Some will charge a fee. Legally, brokers who charge fees need to tell you this up front before doing any business with you. Fees can be one-time fees, such as a fee to start a policy, or they are recurring, such as whenever a policy is renewed.
