Agency Fees in Georgia

[indy_ga]

I operate a small independent agency in Georgia and I've been toying with the idea of agency fees the past month. I've asked my agency reps their thoughts and some are for it, some think it's illegal, and some have no idea. The Georgia department of insurance isn't helpful because I've gotten two different responses.

I'm averaging a savings of $430 when people switch and I am the only person in town who represents most of the carriers I have. With the amount of rewriting I do, I don't see an issue charging $20-30 to get the policy started or rewrite it in another company if I find a cheaper rate.

Is it legal to charge an agency fee in GA as long as I disclose to the insured, meaning I get them to sign a form stating they understand they're being charged by my agency?

Any help I can get in this matter would be appreciated.

 

[wingateexpress]

Why would you want to do that?

 

[goillini52]

I operate a small independent agency in Georgia and I've been toying with the idea of agency fees the past month. I've asked my agency reps their thoughts and some are for it, some think it's illegal, and some have no idea. The Georgia department of insurance isn't helpful because I've gotten two different responses.

I'm averaging a savings of $430 when people switch and I am the only person in town who represents most of the carriers I have. With the amount of rewriting I do, I don't see an issue charging $20-30 to get the policy started or rewrite it in another company if I find a cheaper rate.

Is it legal to charge an agency fee in GA as long as I disclose to the insured, meaning I get them to sign a form stating they understand they're being charged by my agency?

Any help I can get in this matter would be appreciated.

I don't know about your state, but I think I read that it was illegal to make commission AND charge a fee at the same time.

 

[somarco]

Unless the rules have changed, you need a counselors license to charge a fee and are not allowed to charge a fee and collect a commission.

Why would you want to charge an app fee? Are you writing Hi F with United American and need to make some money?

 

[indy_ga]

I should have clarified. This is a P+C non-standard agency. There's a high service aspect of having to rewrite due to cancellations etc, and I can see the service work stacking up and not really getting paid for it. A lot of the companies have "service fees" tacked on to the policy, so I was wondering if I could do the same.

If I'm saving the insured money by switching from a $200 to a $100 policy, I don't see why it would be frowned upon to charge a $20 rewrite fee, they're still saving money and I'm increasing profits.

 

[somarco]

Check with the GA DOI. I doubt the rules are different for P&C vs other lines.

 

[nbarnes]

I'm in GA dealing with surplus lines professional liability policies and we are NOT allowed to charge any kind of administration/broker fee on policies in GA. Also, if a carrier charges any fee, it has to show on the declarations page.

Not sure if that really helps you...I can ask a few of my agents here if they charge fees.

 

[somarco]

Excess and surplus lines are an entirely different animal with different rules including full disclosure on the dec page.

 

[wingateexpress]

I think the OP is trying to charge extra to increase profits. Almost like adding additional premium and pocketing the extra money. Indy if you are going to do this you need to have the customer sign a disclosure document. I would highly suggest against this since it may not even be legal.

 

[VolAgent]

I think the OP is trying to charge extra to increase profits. Almost like adding additional premium and pocketing the extra money. Indy if you are going to do this you need to have the customer sign a disclosure document. I would highly suggest against this since it may not even be legal.

This is legal in many states, charging fees to substandard, high maintenance clients. Basically, guys who get a insurance card so they can renew a tag/license and then promptly drop the coverage. I can certainly see the desire to charge these fees. However, I wouldn't relay on an internet forum to tell me it is ok. Call the DOI and/or ask an attorney.