Have you seen online or heard the misinfoirmation that insurance brokers pocket 80% of your premium?
And are you now wondering whether working with a broker is just throwing money away compared to going straight to an insurance company?
Here’s the truth: that 80% number is wildly misleading. In this article, you’ll learn what brokers actually get paid, why that compensation exists, and how brokers often save you money—especially at renewal time.
Where Does the 80% Claim Even Come From?
A few social media personalities have spread the idea that insurance brokers take up to 80% of your premium. But what they’re not telling you is this:
That number typically refers to certain one-time life insurance commissions , not to your home, auto, or business insurance premiums —and even then, it doesn’t reflect actual earnings after service costs, taxes, and overhead.
What Insurance Brokers Actually Earn
Let’s clear it up: brokers typically earn between 11% and 15% of your premium. This isn’t just for selling you a policy—it covers:
- Year-round customer support
- Claims assistance
- Annual policy reviews and remarketing
- Access to multiple insurance carriers
- Local, personalized service
And yes, that commission keeps staff employed in your community. We’re not faceless call centers—we’re your neighbors.
�� A quick breakdown of your $1,000 premium:
- Insurance company: ~$880
- Broker compensation: ~$120
Why a Broker Can Actually Save You Money
I started as an agent in 1980—selling for one company only. If rates went up or coverage changed, you were stuck.
That’s why I became a broker. Brokers aren’t tied to one company. We shop 10 or more carriers to find the best deal, especially at renewal time when your premium might unexpectedly jump.
Agents = 1 option.
Brokers = Multiple.
Which one gives you more leverage?
Is a Broker Right for Everyone?
Not always. If you already get discounts for bundling through a direct insurer, or if you’re loyal to one company no matter the rate, working directly may suit you just fine.
But if you want flexibility, price comparisons, or someone to handle the messy parts of insurance for you—brokers are built for that.
Conclusion: Let’s Get You Better Coverage for Less
Now that you know brokers don’t take 80%—and in fact, often help you avoid overpaying—what’s next?
If you’re tired of rate hikes, limited options, and waiting on hold when things go wrong, we can help.
Let us compare your policy across multiple carriers. You might be surprised what you’re missing.
The team at Vargas & Vargas Insurance can be reached at 617-298-0655 to help you get clarity, control, and confidence in your coverage—year-round.
➡️ Next Step:
Curious about how switching from an agent to a broker actually works?
Watch: Is Your Insurance Agent Or Broker Working For You?
