Homeowners Insurance broker question

What is the deal when you use a broker? Do you have to pay a fee to the broker? Is there a reason why one would use a broker over a "big" company besides price and availabilty?

I am so uneducated in this whole homowners business.

Thanks!

Re: Homeowners Insurance broker question

You do not pay fees with a broker in most cases. A broker gets the policy at cost thats why it winds up being less sometimes, but most insurance companies require you to buy the policy through a broker except for Allstate, StateFarm, Geico, Progressive, Libertymutual, and Nationwide. There may be others but those are off the top of my head.
If you are unhappy with your premium your broker can re-market you with another carrier without you shopping around yourself rates vary so much from company to company.

Re: Homeowners Insurance broker question

A broker is someone who you can go to and call and speak to as opposedto calling a general number and speaking to anyone who answers. Usually brokers will take care of your account and look out for you upon renewals to see if you need more/less coverage and also see if they can save you money buy moving your insurance elsewhere

Re: Homeowners Insurance broker question

Brokers sometimes charge a small fee when you first start a policy to cover the overhead charges that they incur running your credit and other reports needed to shop the quote with the companies they use.

Brokers have access to companies that do not sell directly to the public. Prices can be better too.

Direct companies are writing less and less on LI especially if you are in or near a flood zone (and this is even more true now that FEMA finalized that rezoning of the flood maps the beginning of the year)

Brokers usually don't charge a fee to run a quote for insurance so it can't hurt to get prices from them. Just make sure that if you do shop around using a broker & getting direct quotes you are getting quotes that have the same coverages, liability and deductible. Be sure to ask about your deductible (usually $1000) and your hurricane/windstorm deductible (usually 5% for a catagory 2 or more) To figure out an approximate coverage amount take the square footage of your home and multiply it by $225 (the approx. cost to rebuild per square foot) Also, most companies offer a 125% complete replacement but some don't.

Hope all this helps and doesn't confuse you more !!


(not soliciting - just want to say - I work for a brokers office so that's where I know the information from)