Should I take out car insurance via a broker?

Key takeaways

• A car insurance broker acts as an intermediary between you and insurance companies, helping to find a policy that matches your needs and budget.

• Brokers provide expert advice, save time, and may offer access to specialized insurance options.

• Be cautious of ghost brokers, who offer fake insurance policies. To avoid scams, verify brokers’ credentials with official bodies.

What is a car insurance broker?

A car insurance broker acts as a middleman between you and the insurance world. Their job is to sift through the multitude of insurance options to find a policy that suits your needs and budget. They gather information from you, such as your driving history and vehicle details, and use this to present you with a selection of suitable insurance options.

Brokers can also be a valuable ally in the event of an insurance claim. They offer guidance and can negotiate with the insurance company on your behalf. For their services, brokers earn a commission from the insurance company for each policy sold. This commission is usually included in your monthly or annual car insurance premiums – so it’s not always immediately clear how much you’re paying for a broker’s services. But it does mean you’re effectively paying for the broker’s efforts.

How do car insurance brokers work?

Car insurance brokers are independent and prioritize your interests. Under British Insurance Brokers Association (BIBA) rules, car insurance brokers are obliged to put your interests ahead of an insurer’s, known as "Putting you first." However, they may not have access to every insurer and often work with a limited panel of insurers. This could mean missing out on the very best deals. To ensure you're getting the best deal, it's wise to compare the options a broker offers with those available elsewhere, such as on comparison services like MoneySuperMarket.

What are the benefits of using a broker?

There are several advantages to using a broker. They provide expert advice, save you time and effort, and may have access to preferential rates. A broker may be able to get car insurance quotes from specialist insurers (such as one that covers classic cars or kit cars) that don’t usually deal directly with ordinary members of the public.

Is it cheaper to use a car insurance broker?

While brokers aim to find the best insurance at the lowest price, the reality is that their commission may make the policy more expensive. It's important to weigh the potential savings a broker might find against the cost of their commission.

What are the disadvantages of using a broker?

Despite the benefits, there are some drawbacks to using a car insurance broker. These include the added cost of broker commissions, limited insurer options, and the potential to miss out on deals from insurers that only sell directly to consumers.

What's the difference between a broker and an insurance agent?

It's important to distinguish between a broker and an insurance agent. Unlike brokers, insurance agents represent a single insurance company and do not charge a commission. However, they offer a limited range of policies, which can reduce your chances of getting the best deal.

What are ghost brokers?

A ghost broker is a scam company or person that claims to offer cheap car insurance deals but actually provides fake or invalid cover that won’t protect you if you need to make a claim. Falling victim to a ghost broker can lead to serious legal and financial consequences, including penalties, points on your license, vehicle seizure, and liability for accident costs.

How can I avoid ghost brokers?

To steer clear of ghost brokers, exercise caution with brokers using informal selling tactics, verify their registration with official associations like the British Insurance Brokers Association and the Financial Conduct Authority, and be sceptical of deals that seem too good to be true. Ensure they follow proper processes for obtaining insurance.

What should I do if I suspect a ghost broker?

If you suspect you've bought insurance from a ghost broker, verify the policy directly with the insurance company or check the Motor Insurance Database. However, if you can prove you’re genuinely a victim of fraud because of being tricked by a ghost broker, then you should be able to avoid any legal problems. In some cases, you’ll also be able to claim back any resulting losses from the Motor Insurers’ Bureau (MIB).

Compare car insurance with MoneySuperMarket

It’s quick, reliable and easy to find cheap car insurance quotes when you compare policies on MoneySuperMarket. Just tell us a little about yourself, your driving history, and the car or cars you want to insure, and we’ll show you a wide range of suitable deals from FCA-approved insurers.

Looking for car insurance doesn't have to be a solo journey. Whether you choose to work with a broker, go directly through an insurer, or use a comparison service, the key is to stay informed and vigilant. Remember, the best policy is one that offers the coverage you need at a price you can afford, with the peace of mind that comes from knowing you're genuinely protected.

For more information on checking when your insurance is due, take a look at our guide here.