Car Insurance Broker vs Car Insurance Agent: Who Makes More?

Car insurance brokers and car insurance agents are similar in the sense that they both receive a commission for selling car insurance. The difference between the two is that a car insurance brokers can sell policies from multiple agencies while an agent only sells one agency’s policy.

If you ask a client the difference between an insurance agent and an insurance broker, they probably wouldn’t know. But as an industry professional, we think it’s important for you to know the difference, especially if you sell car insurance. Here’s what we need you to know:

Car Insurance Broker

Car insurance brokers work for car insurance agencies or companies as a middleperson between the customer and the company. They can also be self-employed professionals who promote themselves as independent agents.

Car insurance brokers are allowed to work for more than one agency at a time but need permission from the state board first before they can sell policies for other companies without any supervision by that particular agency.

According to salary.com, the average salary of an insurance broker in the state of New York is expected to be over $186,434 per year in 2023. 

Car Insurance Agent

Car insurance agents are licensed to sell car insurance policies and can only work for a single company or agency. Insurance agents are usually paid on commission basis, which means that the more policies you sell, the higher your pay is going to be.

There are generally two types of car insurance agents; captive agents and independent agents.

Captive agents do not have the same capability to represent other companies and they need permission from their company for them to be able to work with another car insurance agency.  One perk of being a captive agent is having a base salary. Regardless of the sales and commissions they make, they always have their base salary to fall back onto.

Independent agents, on the other hand, are free to work for as many companies or agencies as they want. Independent agents also have more flexibility with their salary and can negotiate a higher commission than what’s initially offered by the company. One perk of being an independent agent is that they can sell policies from various companies. This enables them to sell policies that have a higher commission margin.

A car insurance agent can make about $100,000 a year. However, the national average for insurance agents is between $45,000 to $60,000 a year.

Car insurance brokers usually make more than car insurance agents because a broker generally has a larger pool of clients they can cater to than an insurance agent can.

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How to Become a Car Insurance Broker?

If you’ve decided to become a car insurance broker, you’ve made a wise career decision. Insurance brokers have rewarding careers assisting clients in the selection of insurance coverage. Working as a car insurance broker can be done from home or in an office. To become one, you must complete a series of educational and licensing requirements. Here are a few steps you need to follow: 

Meet the educational and licensing requirements: In most states, insurance brokers must have a high school diploma and have completed a pre-licensing course. In order to sell insurance legally in your state, you must also pass a licensing exam. 

Gain experience: Many insurance companies prefer to hire brokers who have prior industry experience. Working as an agent or completing an internship can help you gain experience. 

Create a network: Creating a network of contacts in the insurance industry can help you land jobs and grow your business. Participate in industry events, join professional organizations and network with other brokers and agents. 

Obtain certification: To demonstrate your expertise and credibility to potential clients and employers, consider obtaining a professional certification such as the Chartered Property Casualty Underwriter (CPCU) or the Certified Insurance Counselor (CIC). 

Improve your business skills: Operating your own insurance brokerage requires not only insurance knowledge but also business acumen. Learn how to market yourself, sell insurance products, communicate with clients, manage your finances, and run your own business.

How Does a Car Insurance Broker Make Money?

If you are considering becoming a car insurance broker, you ought to know how you will be making money.  Most people are unaware that as a car insurance broker, you cannot bind coverage for an insurer even though you provide the best car insurance policies for individual or business needs.

You will be making money off commissions from selling any type of car insurance to individuals and businesses where commission ranges based on many things. Brokers sell all types of insurance and aren’t just limited to car insurance. This includes health care, homeowner’s policy, accident plan as well as life and annuity policies.

As an insurance broker, you will often earn a lump sum percentage against the first-year premium of a policy that you sell. After that, you will be earning smaller but ongoing annual residual income payments over the course of your client’s policy life.

In order to find your clients the best possible policies for their needs, it is important for you to understand what they are looking for. Especially in terms of costs and benefits when going through the process of buying insurance.

Tips For Car Insurance Brokers to Make More Money

If you are a car insurance broker who is looking to make more money, here are some well-researched tips for you:

Understand Your Clients

As you already know, being a broker is representing your clients to insurance providers. To be better at your job, get to know your clients better. For example, if you have a client who is in their early 20s, it is advisable to understand their budget for car insurance. Most of the younger clients have a tight budget and it wouldn’t be in either party’s best interest to provide them with an extremely comprehensive policy that costs thousands of dollars.

In such cases, ask your clients questions like what coverage is important for them and do your research accordingly.

Providing Exceptional Customer Service

It is mandatory for car insurance brokers to be good at customer service. But it’s not only because of their client-centric approach to work. Good customer service is vital for the growth of any business. According to Super Office, businesses that focus on customer service are 60% more profitable than those who don’t.

So, if you’re looking to exceed your sales budget, we recommend you start building on your insurance customer service strategies.


After working in the industry for a while, finding new customers can be quite challenging. Once your client base becomes stagnant, you need to find better ways to lure in customers, one of them is networking.

Through networking, you can meet clients who are in need for a change in insurance companies or younger clients who have no clue about getting insured. You can also meet the owners of car insurance companies. Networking can really help you boost your client base.

Partner With Car Companies

As an insurance broker, you can partner with companies that sell cars. It could be big names such as Ford or Toyota or even small car dealerships that sell second-hand cars. According to Reference, in a rough estimation, about 38,356 cars are sold daily in the U.S. So, this strategy is basically a foolproof plan.

Your partnership can work if both parties agree to exchange clients. For example, if the partner car company sells 15 cars a day, they refer you to them for car insurance. On the other hand, if you sell five policies per day to different clients, you refer to the said car company for their car repair needs or even if they want to buy or sell cars.

Reach out to businesses as well as individuals by sending them emails or leaving flyers at community centers near them.

Use Digital Marketing Tools

The best strategy to market yourself as a car insurance broker includes building a website and generating more leads. You can also write an article about insurance brokerage in various online and offline publications. This is a great way to get exposure since people who need this service will search for it themselves.

Modern innovative tips to make more sales include using social media, blogging about insurance topics or hosting an online seminar.

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Insurance Companies To Work With

Even though your primary job is to work for your client’s interest, it’s also important to know which companies are reliable and will provide you a better margin for commissions. We have done the research for you, and here are some companies that you should work with as a car insurance broker for:

Amica Mutual


Auto-Owners Insurance Group

The Hartford

Renegade Insurance


State Farm

All State





According to Statista, there are more than 400 thousand people working in the insurance sales industry. And this number is only projected to go up. As a car insurance broker, you need to have an extra edge that makes you stand out from the crowd. You can start by having excellent customer service or being knowledgeable about cars.

One of the only ways to retain and attract clients is to provide them a type of value that no one else can. If you are looking to be represented by a team of professionals to change your sales game, make sure you add your listing on our insurance directory.

In any case you have more questions about being a car insurance broker or just want to discuss your business plans, get in touch with us! If you wish to work with us, let us know in the comments below and our representatives will get back to you.

How to find the right insurance for your business needs

New businesses are likely to require a number of different types of insurance. Some are compulsory:

employers’ liability insurance – worth at least £5 million – for most types of employees

commercial motor insurance – if your business uses vehicles on the road or other public places

Other types of insurance your business may require include:

buildings and contents insurance

equipment insurance

key person insurance and health insurance for the owner-manager

life and health insurance for employees

directors’ and officers’ liability insurance

business continuity or business interruption insurance

public liability insurance

product liability insurance

professional indemnity insurance

goods in transit insurance

credit insurance

fidelity insurance – which protects against dishonesty or theft by staff

travel insurance

legal expenses insurance

money policies

The Association of British Insurers (ABI) provides further information on business insurance.

It’s important to monitor your level of insurance cover as your business develops. Schedule an annual review to consider how your needs have changed. Weigh up the cost of the premiums against the level of risk you’re running.

Using brokers

An independent insurance broker can help you select the right level of cover, assess which risks pose the greatest threat and find the best deal.

Some brokers charge a fee for their services but most obtain payment from the insurance companies they tell you about. If you purchase products or services from insurance intermediaries, you have the right to ask how much commission they receive for selling the product or service to you.

Although you can buy cover directly from insurance companies, it’s generally best to use a broker, as they can provide advice and assess your insurance needs. If you choose to deal directly with an insurer, check they are a member of the ABI.

It is also worth asking your broker what Professional Indemnity or Errors and Omissions insurance they have in place themselves, in case an error by them leads to you not having the right coverage when you claim.