Shouldn't brokers be cheaper?

corblimey

My car insurance is up next month, and my brokers (Britton) sent me through a renewal notice. I decided to idly check a few quotes online, figuring they'd coming pretty close to the Britton quote, but I'm surprised to find that going directly to AIG (who Britton are using for my cover) is about 80 quid cheaper. I phoned AA and found they're using AIG too, and quoting me even more. I thought the point of a broker was that by buying insurance in bulk from the provider, they can pass on (some of) the savings to you?

peteb2

Going to a company direct is likely to be cheaper than a broker. Broker has to be paid commission. Good broker adds value to a product as they are likely to help you with claims etc and general advice where a company direct is not obliged to tell you about other products.

Also just to be clear - AA is a tied agent. i.e they only use one company for their motor insurance are therefore not independent.

pow wow

Sometimes they're cheaper, sometimes they're not, particularly if an insurer is starting to sell direct to the public rather than be agency only. The rates applied to broker policies are usually different (i.e. cheaper) but then commission is added on to that for the price the policyholder pays.

Victor

Brokers get a commission in the order of 5% - this is the same 5% that you might get off if you buy insurance via the internet. However, their advantage is that they know how to buy the cheapest insurance from the various companies - this is how they can be cheaper. I suspect any bulk discount they get is modest, although traditionally they have received a lot of incentives from insurers. Every policy is individual - you are insured by the insurance company, not the broker.

Pablo Sanchez

As said above they can be cheaper. It really depends on what companies they hold agencies with. They may be able to provide you with the cheapest quote from the companies they deal with, but thats not to say its the cheapest on the market for a particular customer.

These days its just so easy to get your quotes online i cant see a big need for brokers in the car insurance market except for the online ones like chill etc.

Corvo

The broker will look after you when the going gets tough (or at least they should). All well and good having cheaper insurance, but it's there for when something bad / unfortunate happens and when it inevitably does, you want the best possible people looking after it for you.