Usually not. The insurer's price already includes its cost of selling to you. With no broker in the middle, the insurer keeps that money instead of paying it out, so your premium does not drop. What you give up is the market: a direct insurer can only show you its own price, while a broker can show you several. Who this is for: owners deciding whether to buy from an insurer's website or its own local agent, or to use an independent broker.
The short version
- Brokers are paid by the insurer out of the premium. Cutting the broker out does not cut the premium in most cases.
- A direct insurer or its captive agent can quote one company. A broker can quote many, including specialty markets.
- Direct is fine for simple, low-risk businesses in standard categories. It falls short for contractors and anyone an insurer considers harder.
- Some direct insurers do price low for the trades they want. A broker can usually include that insurer in the comparison anyway.
- The real cost of buying direct shows up later: at certificate time, at audit, and when the insurer will not renew you.
Who am I actually buying from in each case?
| Channel | Who they work for | How many insurers you see | Best fit |
|---|---|---|---|
| Direct writer (insurer's website or call center) | One insurance company | One | Simple businesses in standard categories |
| Captive agent | One insurance company, through a local office | One | Owners who want a local face and already fit that insurer |
| Independent agent or broker | You. A broker has contracts with many insurers and can send your application to all of them. | Several to dozens | Most contractors and trades |
For more, see independent agent versus buying direct and the difference between a broker and an agent.
Why doesn't the price drop when there is no broker?
Every insurer builds its selling cost into the premium it files. When a broker places the policy, the insurer pays the broker a commission from that premium. When you buy direct, the insurer spends that same money on its website, its advertising, and its call center, or it keeps it. Either way, the filed rate for your business is the filed rate. In most cases the same policy from the same company costs the same through any door.
When is buying direct a good deal?
Direct works well when three things are true. Your business fits a standard job category. You have no claims and no unusual exposures. And the direct insurer happens to want your trade this year. A one person consulting firm or a small retail store often fits. A few direct insurers also price aggressively for specific trades they want, and if you are one of them, their price can be the lowest available.
Even then, you lose nothing by asking a broker to include that insurer in a comparison. Many direct writers also sell through brokers.
What does buying direct cost me later?
- Certificates. When a general contractor needs your certificate with the right wording by Monday, a call center may take days. A broker's client often issues it in a minute.
- Policy changes. Direct insurers often offer a fixed menu of add-on pages (endorsements). If your contract wants a change they do not offer, your only option is to leave.
- Audit disputes. When the year-end payroll check comes back high, a broker argues your side. Direct, you argue with the insurer alone.
- Non-renewal. If the direct insurer decides it no longer wants your trade, you start from zero. A broker already has your file and the other markets.
- Exclusions you did not see. Online forms rarely explain that the policy excludes residential work or work above two stories. You find out at claim time.
How do I compare a direct quote to a broker's quotes fairly?
Give both the same facts: the same description of your work, the same payroll and sales, the same claims history report, and the same limits. Then compare limits, deductibles, exclusions, and the extra wording your contracts require, before price. Our guide on why quotes vary shows exactly how to line them up. If the direct quote still wins on the same coverage, buy it. A good broker will tell you so.
What this looks like in real life
Illustrative example. It is typical of what we see and is not a promise of how any specific situation would be handled.
The setup: A landscaping company in Arizona with 6 employees and about $700,000 in yearly sales buys general liability and workers comp directly from an insurer's website for about $11,400 a year. It is easy, and the owner assumes he saved the broker's cut.
What went wrong: In year two a commercial property manager asks for a certificate showing additional insured wording (the customer can use his policy if sued because of his work) and a waiver of subrogation (his insurer agrees not to chase the customer for money it paid). The direct insurer's menu does not offer the waiver. The owner loses the $48,000 contract.
What it cost: Illustrative numbers: a broker later shops the same business to five insurers. The best package with both endorsements included is about $10,900, roughly $500 less than the direct price. Nothing was saved by buying direct, and one contract was lost.
The fix: Buying direct did not lower the price. It removed the person who would have caught the missing wording before the contract came in.
Frequently asked questions
Q: Is buying business insurance directly from an insurer cheaper?
Usually not. The insurer's premium already includes its selling cost, and without a broker the insurer keeps that money rather than passing it to you. You also see only one company's price instead of several.
Q: Do brokers charge me a fee on top of the premium?
For most standard policies, no. The insurer pays the broker a commission out of the premium. Some specialty placements carry a separate broker or wholesaler fee, and disclosure rules are set state by state, so ask for any fee in writing before you buy. Direct insurers rarely charge a broker fee because there is no broker in the chain, but they do charge their own policy and installment fees. Read the total on any quote, not just the premium.
Q: Can a broker quote the same insurer I found online?
Often yes. Many insurers that sell direct also sell through brokers, at the same filed rate. If a particular insurer only sells direct, you can compare its quote to the broker's quotes yourself.
Q: What kind of business should just buy direct?
A simple, low-risk business in a standard category with no claims, such as a solo consultant or a small shop, often does fine buying direct. Contractors, anyone with employees in the field, and anyone with a past claim usually do better with a market comparison.
Q: What is a captive agent, and is that the same as buying direct?
A captive agent sells one insurance company's policies from a local office. It is a local version of buying direct. You get a person, but you still see one company's price.
Q: If I buy direct now, can I move to a broker later without changing insurers?
If the insurer also works with brokers and the new broker already has a contract with that insurer, yes. A one page letter you sign, called a broker of record letter, tells the insurer that a new broker now represents you. Your policy, price, and renewal date stay the same. Most insurers hold the letter for a few days, commonly 5 to 10, so your current agent can respond. If the insurer only sells direct, the broker would need to place you with a different company.
How Morrow helps
Morrow is a licensed independent commercial insurance brokerage that works with contractors and trades every day. Comparing a direct insurer's price against the whole market with one application, and catching the coverage gaps a website will not mention, is what we do for owners weighing direct against a broker.
- Free contract review. Send us the contract or bid documents and we mark up the insurance section in plain English, whether or not you buy anything from us.
- Free, instant certificates. Clients issue their own certificates of insurance online in about a minute, any hour, any day, at no charge.
- Markets you cannot reach online. One application, shopped across many insurance companies for general liability, workers comp, auto, umbrella, and pollution coverage.
One more thing. This article is general information and is not legal advice or a statement of coverage. Your contract and your policy wording control in every case. Requirements vary by customer, by state, and by insurance company, so have a licensed advisor review your own contract and your own policy before relying on any of it.
Last updated: Reviewed by the Morrow commercial lines team. Last updated September 2026.