Insurance brokers primarily make money through commissions and sometimes fees:

• Commissions: The main source of income for insurance brokers is commissions paid by insurance companies. When a broker sells a new insurance policy or helps renew an existing one, they earn a commission, which is a percentage of the policy's premium. This commission typically ranges from about 2% to 10%, depending on the type of insurance, the insurer, and state regulations. For example, life insurance brokers often earn higher initial commissions, sometimes up to 100% of the first year's premium, while auto insurance commissions are usually around 5-10% of the premium. Brokers may receive a larger commission on new policies and smaller renewal commissions over time. These commissions are paid by the insurer, not the policyholder directly, and are included in the premium cost

• Broker Fees: In some cases, brokers charge clients fees for specific services such as consultations, policy changes, or handling complex insurance needs. These fees are separate from commissions and must be disclosed upfront to clients. Broker fees are less common and often regulated by state laws

Brokers act as intermediaries representing the client, helping them find the best insurance coverage by comparing policies from multiple insurers. Their compensation through commissions and fees reflects the service of guiding clients through complex insurance choices while ensuring the broker is motivated to maintain client satisfaction for ongoing renewals

. In summary, insurance brokers make money mainly by earning commissions from insurance companies based on the premiums of policies they sell or renew, and sometimes by charging additional fees for specialized services.