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Car insurance brokers: Should you use one?

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Finding the right car insurance can be a daunting task, especially when you have particular needs or are in search of a specialised policy. With numerous options available in the market, trying to compare car insurance deals to find the one that best aligns with your requirements can often feel like searching for a needle in a haystack.

However, there’s a solution that could streamline this process and potentially save you both time and money – enlisting the services of a car insurance broker. These professionals possess the expertise to navigate the insurance maze, ensuring that you secure the most suitable deal at an optimal price.

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Car insurance brokers at a glance

  • Car insurance brokers can be useful for drivers with specialist needs, such as classic car owners, sports car enthusiasts, and those with criminal records
  • Always check the size of a car insurance broker’s panel, and whether it is whole-of-market, to ensure you’re getting a full comparison
  • Be aware of ghost brokers – check if they are registered with the FCA and BIBA

What does a car insurance broker do?

A car insurance broker is a professional who serves as an intermediary between customers and insurance providers. Unlike a direct agent or insurer representative, a broker works independently to source the best car insurance deals based on your needs. This independence means they function as a middleman, usually working impartially and not being directly tied to any single insurance company. Their primary goal is to eliminate the stress and hassle of finding the right car insurance policy for you.

One significant advantage of using a broker is that their assistance doesn’t end once you’ve purchased a policy. If you ever need to file a claim, they can guide you through the process, ensuring it’s as smooth and straightforward as possible. Their knowledge of the intricacies of various policies can be invaluable, especially in challenging or contentious situations.

However, it’s essential to note that the services of a car insurance broker are not typically free. They often earn their income through commissions from the insurance policies they sell. This means that, when you purchase a policy through a broker, a portion of your premium might go towards their commission. Despite this, many people find that brokers save them money in the long run by finding better deals or more suitable coverage.

Is a broker the same as a car insurance agent?

Car insurance agents might appear similar to brokers, but crucial differences exist. The primary distinction is their affiliation. An agent works for a specific insurance provider, promoting and selling policies only from that company. In contrast, a broker operates independently and can offer policies from various insurance companies. Because of their ties to a particular insurer, agents might not always provide the range of options a broker can. However, unlike brokers, their services are often free.  

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Who should use a car insurance broker?

It might be worth considering using a car insurance broker if:

  • You have a classic car: unlike regular cars, vintage and classic cars have unique values, which often appreciate over time. Brokers specialising in this area understand the nuances of classic car insurance, ensuring coverage takes into account its rarity, restoration costs and sentimental value
  • You own a sports car: sports cars often have higher premiums due to their power, speed and associated risk factors placing them in more expensive insurance groups. Brokers with expertise in sports car insurance can guide owners to policies that provide adequate coverage while offering value for money. They understand the performance specifics and potential repair costs of these high-powered machines
  • Your car has been modified: vehicles that have been modified pose a unique set of challenges for insurance. Modifications can drastically change a car’s performance, safety, and value. A broker skilled in this niche knows which insurers are more accommodating to modified vehicles and can help owners navigate potential coverage pitfalls
  • You have a driving offence on your record: it can be tough to get reasonable car insurance if you have any driving offences or criminal convictions. A broker may be able to help you find a suitable level of cover, despite your driving history

What are the advantages and disadvantages of using a car insurance broker?

There are many benefits and a few disadvantages to using a broker to find your ideal car insurance policy.

Advantages Disadvantages
Brokers have access to a broad range of policies and providers, offering more choices There might be an extra cost due to broker fees or commissions
Brokers have experience and understanding of the insurance industry, helping you navigate complex policies The commission is often integrated into your insurance premium, making it challenging to determine how much you’re paying the broker
A broker might obtain car insurance quotes from niche insurers, such as those specialising in classic or kit cars or convicted drivers, who typically don’t interact directly with the general public Some insurance providers offer exclusive deals directly to consumers, bypassing brokers. Therefore, you might miss out on such opportunities when relying on a broker
Some brokers have partnerships with insurance providers, allowing them to secure more competitive car insurance rates
Brokers can help with the claims process, ensuring smoother communication with insurers
Brokers do the legwork, comparing different policies and providers, thus saving you the time and hassle of doing so yourself

Is it expensive to use a car insurance broker?

The primary cost associated with a car insurance broker is the fee or commission they charge for their services. It’s important to note that many brokers earn their money through commissions from insurance companies, often integrated into your monthly or annual premiums. This means you might not always see a separate charge for the broker’s services, but rather, it’s embedded in the overall cost of your policy.

Some brokers charge a fee based on a percentage of your premium. For instance, if they charge 10 per cent and your annual car insurance premium is £500, then the broker’s fee would be £50 annually. 

There might be added one-time charges when taking out a new insurance policy, tasks, such as assisting with claims, or even an annual management fee for maintaining policies through them. While brokers can set these fees, they must be transparent and provide upfront disclosures.

While a cheap car insurance broker may sound appealing, looking beyond just the broker’s fees is crucial. Consider their overall value – access to multiple insurers, specialised knowledge, time savings, and post-purchase support like help with claims. To determine if using a broker is financially sensible, calculate the annual or monthly premiums quoted with their commission included and compare it against quotes obtained directly from insurance providers.

Are car insurance brokers regulated?

Car insurance brokers are subject to regulation to ensure their operations are transparent, fair, and in the best interest of the consumers.

The UK’s primary body regulating car insurance brokers is the Financial Conduct Authority (FCA). The FCA ensures that brokers adhere to specific standards, guaranteeing they are honest and work in their client’s best interests. The FCA establishes guidelines, investigates breaches, and can take enforcement action if necessary.

In addition to the FCA, the British Insurance Brokers’ Association (BIBA) also plays a role in the governance of brokers. While BIBA isn’t a regulatory body in the strictest sense, it’s a leading trade association for the UK insurance broking sector. Members of BIBA are expected to uphold a code of conduct, ensuring they maintain high standards of service and professionalism.

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What is ghost broking and are there other considerations I should be aware of?

A ghost broker is a fraudster who poses as a legitimate insurance broker to deceive you into purchasing a fake or invalid car insurance policy. These dishonest individuals or groups use various tactics to make their scams appear as genuine as possible, taking money from unsuspecting victims and leaving them without valid insurance coverage.
Known ghost broking scams include:

  • Real policies with fake details: Ghost brokers may purchase genuine policies from legitimate insurance providers using false details. Once the policy is secured, they then sell these policies to customers. Because the policy is registered with false information, it becomes invalid for the buyer
  • Selling fake policy documents: Some ghost brokers design and produce fake policy documents that look genuine. They then sell these to customers as if they are from legitimate insurance providers, when in reality, they offer no actual coverage
  • Policy cancellation after payment: In some cases, a ghost broker might set up a genuine policy and then ask the customer to pay the premium. Once the payment is received, the broker cancels the policy and pockets the refund, leaving the customer without any insurance

If you become a victim of a ghost broking scam, not only do you lose money, but you’re  left without valid insurance. Driving without valid insurance is illegal and can result in several penalties:

  • You could face substantial fines
  • You might receive penalty points on your driving licence
  • In some cases, your vehicle can be seized or even destroyed
  • It can lead to increased future insurance premiums because of the lapse in coverage or penalty points

How to avoid ghost broking scams

To avoid ghost broking scams, you should:

  1. Beware of their selling tactics: ghost brokers often operate on platforms where they can remain anonymous. Be cautious if a broker approaches you solely through social media, messaging apps, or unsolicited emails. Try to meet them in person or at least have a video call with them. This isn’t foolproof but can act as a deterrent for many fraudsters
  2. Ask for their credentials: before conducting any business, check if the broker is registered with the FCA and BIBA
  3. Monitor their processes and guarantees: genuine brokers have clear and well-documented processes. If a broker makes an exceptionally cheap offer, rushes you into making decisions, or is vague about the details, tread carefully. An absence of formal documentation or lack of transparency in their dealings can be red flags

If you suspect you’re a victim of ghost broking, it’s essential to act swiftly. 

How can I find a car insurance broker near me?

Finding a car insurance broker near you can be straightforward with the right approach. You’ll want a broker who understands your needs and can provide you with the best options available.

A simple online search can yield beneficial results, and you’ll likely be provided with a range of options in your vicinity. From there, you can visit the broker’s website, learn about their services, and possibly even book an appointment.

One of the most common ways to find a broker is through BIBA. They have lists of approved car insurance brokers, allowing you to search for one near you.

Another helpful method is reading trusted reviews. Websites such as Trustpilot or Google Reviews can provide insights from other consumers who have interacted with brokers. By reading about their experiences, you can understand which brokers are reliable, professional, and customer-focused. 

It’s essential to engage with a broker you feel comfortable with and who understands your needs. Speaking with a few different brokers before settling on one is always a good idea, so you’re confident in your choice.

Frequently asked questions about car insurance brokers

Whether or not it is worth using a car insurance broker will depend on your individual needs. If you have specialist requirements, such as a classic car, or need help finding the right policy, a broker could be for you.

However, if you are confident in comparing car insurance providers yourself, and are looking to insure a fairly typical vehicle, you may not need a broker.

Driving with invalid insurance is a serious offence, and if a ghost broking scam ensnares you, you’ll unfortunately find yourself in this precarious situation. If caught driving under such circumstances, there are severe consequences:

  • A fine and six penalty points on your driving licence. Penalty points remain on your driving record for four years
  • Your vehicle could be impounded or destroyed
  • You’ll be liable for any damages if you’re involved in an accident
  • The black mark on your record can make obtaining future car insurance more challenging
  • Disqualification from driving for a set period

Katharine Allison

Energy Saving Writer

As Independent Advisor’s energy saving expert, Katharine, a keen advocate for sustainability, is an authority on solar panels, double glazing, and cutting-edge renewable energy technologies. Her dedication merges with a commitment to enlighten and steer readers toward embracing eco-friendly solutions and the latest trends in sustainability.

With over 10 years of experience, she has worked with some of the UK’s leading companies and publications, including the Federation of Master Builders, Architectural Digest, and Denon Construction. 

Katharine is particularly passionate about consumer causes and animal welfare and has art, philosophy, and psychology degrees. She lives with her sled dogs in East Sussex.

Connor Campbell

Finance Writer

Connor Campbell is an experienced personal and business finance writer who has been producing online content for almost a decade. 

Connor is the personal finance expert for Independent Advisor, guiding readers through everything they need to know about car insurance and home insurance. From how much it costs to the best insurance providers in the UK, he’s here to help you find the right policy for your needs. 

In his capacity as writer and spokesperson at NerdWallet, Connor explored a number of topics close to his heart, such as the impact of our increasingly cashless society, and the hardships and heroics of British entrepreneurs. His commentary was featured in sites such as The Mirror, the Daily Express and Business Insider

At financial trading firm Spreadex, meanwhile, his market commentary was featured in outlets such as The Guardian, BBC, Reuters and the Evening Standard

Connor is a voracious reader with an MA in English, and is dedicated to making life’s financial decisions a little bit easier by doing away with jargon and needless complexity.

Amy Reeves

Editor

Amy is a seasoned writer and editor with a special interest in home design, sustainable technology and green building methods.

She has interviewed hundreds of self-builders, extenders and renovators about their journeys towards individual, well-considered homes, as well as architects and industry experts during her five years working as Assistant Editor at Homebuilding & Renovating, part of Future plc.

Amy’s work covers topics ranging from home, interior and garden design to DIY step-by-steps, planning permission and build costs, and has been published in Period Living, Real Homes, and 25 Beautiful Homes, Homes and Gardens.

Now an Editor at the Independent Advisor, Amy manages homes-related content for the site, including solar panels, combi boilers, and windows.

Her passion for saving tired and inefficient homes also extends to her own life; Amy completed a renovation of a mid-century house in 2022 and is about to embark on an energy-efficient overhaul of a 1800s cottage in Somerset.