Insurance brokers, in plain terms
What a broker does, how that differs from an agent, and when it matters for your policy.
Agencies and brokers by city
Each city page lists its firms A to Z. Ask each firm whether it acts as your broker or as an agent for the company.
The short version
A broker often acts for the buyer. An agent acts for one or more insurance companies. How the law draws that line depends on the state.
In California, for example, the law defines a broker as acting for the buyer, not for the insurer, and that definition doesn't apply to life or health insurance. Many other states license both roles under one producer license, and plenty of firms do both, so the role on your policy is what counts. Ask the firm which role it plays.
Broker, independent agent, captive agent
Three roles, side by side.
How the three roles often differ (state law varies)
- Broker
- Often the buyer, depending on state law and the agreement you sign
- Independent agent
- The insurance companies it has agreements with
- Captive agent
- One company group
- Broker
- Several, including specialty markets
- Independent agent
- Several
- Captive agent
- One
- Broker
- Commission, sometimes a fee
- Independent agent
- Commission from the company
- Captive agent
- Commission or salary from the company
| Broker | Independent agent | Captive agent | |
|---|---|---|---|
| Usually represents | Often the buyer, depending on state law and the agreement you sign | The insurance companies it has agreements with | One company group |
| Companies it can use | Several, including specialty markets | Several | One |
| Usually paid by | Commission, sometimes a fee | Commission from the company | Commission or salary from the company |
If a broker charges a fee in addition to commission, ask for it in writing before you agree.
When a broker tends to help
Harder or bigger risks.
- Business insurance with several parts: liability, property, workers’ comp, commercial auto, cyber.
- Employee benefits for a growing team.
- Property that standard companies decline, such as some coastal or older homes.
- Unusual risks that need a specialty market.
Admitted and surplus lines policies
Some hard-to-place risks go to surplus lines insurers, through a surplus lines broker. In most states, a surplus lines policy isn't protected by the state guaranty fund if the insurer fails. A few states have narrow exceptions: New Jersey's Surplus Lines Insurance Guaranty Fund, for example, protects only certain medical malpractice and small owner-occupied home policies. Ask whether your policy is admitted or surplus lines.
Questions to ask a broker
- Are you acting as my broker on this policy, or as an agent for the company?
- Which companies did you approach, and which declined?
- How are you paid on this policy? Is there a fee?
- Is the policy admitted or surplus lines?
- Who handles claims questions after the policy starts?
Check the license yourself
Brokers and agents hold state insurance licenses. Look the firm up on the state insurance department website or through the NAIC State Based Systems lookup. Our license guide links to all 50 states and DC.
Questions about this page
- What is the difference between an insurance broker and an agent?
- It depends on the state. In some states, such as California, a broker acts for the buyer and an agent acts for the insurance company. Many states license both under one producer license, and many firms do both. Ask the firm which role it plays on your policy.
- Do insurance brokers charge a fee?
- Brokers are usually paid a commission by the insurance company. Some also charge a fee. Ask for any fee in writing before you agree.
- What is a surplus lines policy?
- A policy from an insurer that is not admitted in your state, used for risks standard companies decline. It is placed through a surplus lines broker. In most states it isn't protected by the state guaranty fund if the insurer fails; a few states, such as New Jersey, have narrow exceptions.
- Does InsuranceFinder sell insurance?
- No. InsuranceFinder is a free online database of insurance agents, brokers and carriers. It does not sell policies, give prices or take applications. Each firm page shows the firm’s own published phone number and office address.
Related
Official sources
- NAIC State Based Systems license lookup
- NAIC: state insurance departments
- National Conference of Insurance Guaranty Funds
- California Insurance Code §1623 (brokers)
- New Jersey Department of Banking and Insurance: Surplus lines answer book
Sources checked Oct 2026. Rules change; your state insurance department has the current version.