A car insurance broker works on your behalf to arrange and assist with car insurance. Most car insurance brokers are independent and don't work for any insurance company. Instead, they use their knowledge to shop around for car insurance deals and negotiate with insurers on your behalf. The catch? They sometimes charge a fee for their service.
There are two different types of insurance brokers, and they are required to explain which category they fall into if you ask.
Regardless of which category an insurance broker falls into, they can provide the following benefits:
The cost of using an insurance broker depends on which kind of broker you use, and how expensive your insurance policy is. It might cost you nothing, or it might run into thousands of dollars all up.
As such, a broker with more fees but no commission may be more motivated to find you a good deal in the hope that you decide the fees are worth it, while a broker with no fees but higher commission might cost you a lot less or nothing at all directly, but might steer you towards unnecessarily expensive policies.
Fortunately, car insurance brokers are required to disclose their fees and incentives if you ask. In other words, you have the freedom to pay as much or as little for a car insurance broker as you want, but should be aware of the pros and cons of each. If you already have an insurance broker, find out how much it’s costing you by looking at their Statement of Advice or the Financial Services Product Disclosure Statement (PDS) that they have sent you.
When assessing the cost of a car insurance broker, you need to decide whether the time and money they will save you is worth the fee for their services. Just like comparing insurance policies, getting value for money rather than finding the lowest possible price should be your main goal. If you are using a broker to organise and manage all of your policies, including car insurance, then paying for their time could be money well spent.
A good car insurance broker should be:
As with everything, there are both pros and cons to using a broker.
On the plus side:
On the downside:
Because car insurance brokers are providing financial advice, they are subject to regulations that govern the conduct of all financial services. They must hold an Australian Financial Services (AFS) licence, or be an authorised representative of an AFS licensee. The Australian Securities & Investments Commission (ASIC) is the industry watchdog that monitors the conduct of AFS licence holders.
Brokers must also abide by the standards of the Corporations Act 2001, which require them to:
As a condition of their licence, brokers must also be a member of an external dispute resolution scheme and in the event of a dispute with a client, must abide by the decisions of the Australian Financial Complaints Authority (AFCA).
Brokers who are members of the National Insurance Brokers Association (NIBA) are also required to abide by strict rules of conduct set out in the Insurance Brokers Code of Practice. In short, the rules and regulations surrounding brokers require them to always act in your best interests, and to clearly say when they might not be able to.
In the unlikely event that a conflict should arise between the insurance broker and yourself, you will always have somewhere to turn.
Millions of Australian motorists are putting lives at risk by multitasking behind the wheel, according to new research by Finder.
Read more…
Woolworths is following a spate of providers and will lift their rate on Monday. Here is how they compare.
Read more…
Australians are struggling to keep up with car maintenance and repairs due to the rising cost of living, according to new research by Finder, Australia's most visited comparison site.
Read more…Learn the factors that may cause you to be considered a high-risk driver and whether you might be eligible for cover.
What you need to know about insurance if you’re involved in a car accident that wasn’t your fault.
Allianz vs AAMI – compare policies side by side and see who has what matters to you.
Find out how long you have to file your car insurance claim.
Not sure if you should go with your own repairer or your insurer's favourite? Learn the pros and cons of each here.
Thinking about taking out car insurance under your parent's name? Read on to learn if it really is a good idea.
Your guide to getting car insurance in NSW.
Find out what short term car insurance options are available in Australia.
Car insurance cover notes are no longer available in Australia. Read on to learn why and what your alternatives are.
Find affordable and comprehensive car insurance for P-platers with this handy guide.
Possibly looking for a broker for car insurance for my daughter. 20 yr old who had lost licence for 3 months when 18. Just brought a brand new car and looking for fully comprehensive.
Hi Karen,
Thanks for getting in touch!
A broker would be able to help you find comprehensive car insurance for your daughter’s special case. While we don’t have access to car insurance brokers you may want to view her options from our list of car insurances for under 25s. Please know that insurance for drivers under 25 costs more so it’s important to read through the link given above to help you choose the right insurance for our daughter.
You can press the “Get quote” button to compare quotes from different brands or press the “More info” button to know their car insurance options.
Hope this helps!
Cheers,
Nikki