How do insurance brokers get paid?

Insurance brokers earn commissions on the policies they place, typically 2% to 8% of the total annual premium, often taking a larger share of the first-year premium and a smaller ongoing residual in later years. Brokers can also charge fees for consultative or advisory services, policy changes, and claims filing help; states govern when such fees are allowed and generally require them to be reasonable and agreed by the client. Some insurers pay bonuses or higher commissions to top-performing brokers.