Car and homeowners have been hit by three separate tax rises in the past two years, with the latest Insurance Premium Tax hike from 10% to 12% adding nearly £50 to household bills, according to the Association of British Insurers (ABI).

As consumers increasingly shop around to get the best and cheapest cover for their prized possessions via comparison sites, another avenue worth exploring is through brokers.

There are an estimated 3,000 insurance brokers in the market, according to the British Insurance Brokers’ Association (BIBA), with the latest statistics revealing around 30% of business (personal lines such as car and home insurance), comes through them, generating £8.3bn.

While they appear on price comparison sites, it may not always be obvious to the consumer, or they may dismiss a competitive quote from a lesser known broker in favour of a brand they may recognise or trust more. However, some bigger broker names include Autonet, BGL Group and Swinton.

Simon McCulloch, director at Comparethemarket says consumers should be comfortable using them as they’re fully regulated by the Financial Conduct Authority and should be covered by the Financial Services Compensation Scheme if things were to go wrong. Further, for those using comparison sites where brokers are listed, the due diligence has been undertaken by them.

When could you consider using an insurance broker?

Typically, a broker is used by consumers with more niche needs, such as if you’ve a modified or imported vehicle, have a number of claims or convictions, you need special cover for a caravan or you have a non-standard property or requirement, such as a thatched roof or high valuables.

McCulloch says: “Brokers in niche areas add choice. For people with a higher level of content value for instance, brokers are willing to take that on whereas a large insurer won’t want to get involved with non-standard business types.

“But insurance brokers court more competition, they add value to the market, they have leverage and scale so they can get you a good deal, particularly if they want to keep you as a customer.”

He explains that insurance brokers agree prices with numerous companies but the customer relationship will be with the insurance broker. “You’re buying through them and they hold that relationship with you in the long-term”.

Brokers can be cheaper than going direct as brokers will be keen to retain you as a customer. Sometimes they’ll take the hit in the hope of cross selling products such as breakdown cover, motor legal or home insurance to an existing car insurance customer.

As well as being able to compete on price, Pam Quinn, head of communications at BIBA, says brokers also give consumers valuable advice.

“They clearly spell out what’s covered, what you need, what you have at risk and what your options are. And they’re not just for those people who have something unusual to insure. It’s good to do a shop around as you’re not having to thing about the cheapest option but it’s the advice that’s valuable.”