- 15,041
A classic situation of losing by winning.
Agent Commissions Chart
- Thread starter justaguy
- Start date
- Thread starter
- #12
You're all wrong. I'm not an agent. I had a house burn down that was insured thru Texas Fair Plan. They refused to pay because the policy was written wrong. I'm having to sue the agents E&O. I buy and sell homes for a living, my agent knows this and has written probably 25-30 policies on various houses - usually having 4-5 insured at one time. This policy was written up as primary residence, not vacant, etc. It also wasn't submitted to the 2 other carriers for denial - he just wrote down they were denied. He has admitted in a sworn statement he filled out the application, he admitted he knew this house was going to be sold, he admitted never submitting it to 2 other carriers. We have a mediation in June, but somehow they still are thinking they won't have to pay! I was just curious since I read somewhere (can't find it now) that Fair Plan pays higher commissions. I was just hoping to have a little more ammo for the mediation!! Thanks for the help.
pecosins
Expert
I am not familiar to the procedure of a state fair plan since we do not have it in NV. But we know certain risks are not eligible by underwriting guideline. Did you sign home application? You are responsible for it.
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You can't use commission chart floating out there. it is not accurate. You may request commission paid to this agent by asking that insurance company.
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I'm grabbing my popcorn...can't wait to see what happens!
Agent wrote past policies on your purchases...he must know what he was doing. Hopefully you're not accused of being in cahoots with the agent to claim the E&O.
Agent wrote past policies on your purchases...he must know what he was doing. Hopefully you're not accused of being in cahoots with the agent to claim the E&O.
Not true for P&C Mark. There are no IMOs with P&C as it is a totally different animal. The companies appoint agents directly via their marketing department and the commission structure is generally not negotiable.
A couple points of confusion here..
1) I'm not sure I see a connection between a company's commission structure and an E&O suit? What are you trying to prove here? If your argument is that the agent wrote the business colored by the commission he was earning, then you are actually shooting yourself in the foot because if this is the case, the E&O carrier's position for denial of claim is further strengthened. Typically E&O coverage excludes dishonest, willfull and intentional acts.
2) I would think your suit is against the agent and not the E&O carrier unless you are now pursuing a complaint of bad faith.
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A couple points of confusion here..
1) I'm not sure I see a connection between a company's commission structure and an E&O suit? What are you trying to prove here? If your argument is that the agent wrote the business colored by the commission he was earning, then you are actually shooting yourself in the foot because if this is the case, the E&O carrier's position for denial of claim is further strengthened. Typically E&O coverage excludes dishonest, willfull and intentional acts.
2) I would think your suit is against the agent and not the E&O carrier unless you are now pursuing a complaint of bad faith.
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- 11,995
While perhaps interesting, the commission makes literally no difference.
You might also want to consider that e&o covers errors and omissions, what it sounds like this agent did was downright fraud. If you're right and he was that far off base, you'll likely have to sue him personally. I doubt the carrier has to pay anything, especially because you most likely signed off on the application as well. The agent may or may not have known you were going to sell the house, but you sure as hell should know if you were planning on selling the house.
Unless the agent has a ton of money, you're probably wasting your time, especially if you signed off on the application that outlined everything *you* were agreeing to.
G
Guest
Guest
I understand what the OP is saying....I have a couple companies that pay MORE commission than others.
I see exactly what happened here, The OP flips houses fairly quickly, so the agent wrote the policy with a carrier that pays him more commission, because he might as well make more money since it will cancel soon, and the company he wrote it with (with the higher commission) probally wouldnt write the correct type of policy (landlord, secondary etc.) without the primary house. So the agent simply wrote it as a primary house to make a few extra bucks in commission,
I have some companies that will NOT write the landlord or secondary house without the primary house also. The only way around that is to make it primary, which is WRONG.
I have one company that they have a drop down menu and it says, primary, secondary, seasonal. so in reality, it could have been an honest mistake.
Most of my carriers pay me 15% commission, one pays 16%, one pays only 10% couple pay 12%......so I think that is the OP's question, did the agent write in with a company just for the higher commission?
I see exactly what happened here, The OP flips houses fairly quickly, so the agent wrote the policy with a carrier that pays him more commission, because he might as well make more money since it will cancel soon, and the company he wrote it with (with the higher commission) probally wouldnt write the correct type of policy (landlord, secondary etc.) without the primary house. So the agent simply wrote it as a primary house to make a few extra bucks in commission,
I have some companies that will NOT write the landlord or secondary house without the primary house also. The only way around that is to make it primary, which is WRONG.
I have one company that they have a drop down menu and it says, primary, secondary, seasonal. so in reality, it could have been an honest mistake.
Most of my carriers pay me 15% commission, one pays 16%, one pays only 10% couple pay 12%......so I think that is the OP's question, did the agent write in with a company just for the higher commission?
- 11,995
Doesn't matter if it's for the higher commission. Either it was intentional or it wasn't. It sounds like he can clearly prove that it was intentional which would most likely keep the e&o from paying out on it. Either way, if it was motivated by a higher commission, ease or underwriting, or any other intentional problem I doubt the e&o will pay out.
Glad I'm not the agent.
Glad I'm not the agent.
Not so fast....
We are getting one side of the story here, the agent may not be as wrong as it sounds.
What type of loan is on the house? A homeowner loan or an investor loan? If its a homeowner loan, the OP got this by saying he was going to live there, hence making this a primary residence is CORRECT, or at least, defensible.
As far as commission goes, given you were planning on selling the house, a few percentage points doesn't make much difference. Think about it, even if it was a $1000 premium, the difference between 15% and 20% is $50 max, not worth any sort of hassle.
P&C agents are in it for the renewals, not the original commission.
Also, if the agent wanted the commission, he would have written it vacant. The premium is usually MUCH higher to account for the bigger risk. He would actually make more.
I used to work with a few investors, eventually they went to other agents because they got better rates. Very similar deal, didn't want to pay attention to how the rates were lowered, figured it wasn't a huge risk, they just needed to show coverage. I'd write it correct. That didn't last long, I was to expensive (till you had a loss).
Most fair plans have exceptions to the 2 other carrier rule. Not sure if this one does or if this house would fall into those exceptions. For example, you may not have to submit the application if the house falls out of the scope of standard underwriting guidelines.
Go back and look to see if you signed the application. If so, you said everything on that application was correct. I understand the agent is the expert and you relied on that, but it isn't as clear cut as it sounds.
Dan
We are getting one side of the story here, the agent may not be as wrong as it sounds.
What type of loan is on the house? A homeowner loan or an investor loan? If its a homeowner loan, the OP got this by saying he was going to live there, hence making this a primary residence is CORRECT, or at least, defensible.
As far as commission goes, given you were planning on selling the house, a few percentage points doesn't make much difference. Think about it, even if it was a $1000 premium, the difference between 15% and 20% is $50 max, not worth any sort of hassle.
P&C agents are in it for the renewals, not the original commission.
Also, if the agent wanted the commission, he would have written it vacant. The premium is usually MUCH higher to account for the bigger risk. He would actually make more.
I used to work with a few investors, eventually they went to other agents because they got better rates. Very similar deal, didn't want to pay attention to how the rates were lowered, figured it wasn't a huge risk, they just needed to show coverage. I'd write it correct. That didn't last long, I was to expensive (till you had a loss).
Most fair plans have exceptions to the 2 other carrier rule. Not sure if this one does or if this house would fall into those exceptions. For example, you may not have to submit the application if the house falls out of the scope of standard underwriting guidelines.
Go back and look to see if you signed the application. If so, you said everything on that application was correct. I understand the agent is the expert and you relied on that, but it isn't as clear cut as it sounds.
Dan
G
Guest
Guest
DJS,
I agree with you, I am going to "assume" that the agent was wrong, just a gut feeling, I think the agent wrote it with a company as aprimary when it shouldnt have been for one of 3 reasons.......that company was giving him an override on his commision, I get them all the time, he needed to write a policy with that company to win a bonus or a trip, or that company put him on a low production notice and he was given say 90 days to write 20 policies with them......thats happened to me before.
Just for some reason, I have a funny feeling about this, just my gut feeling
I agree with you, I am going to "assume" that the agent was wrong, just a gut feeling, I think the agent wrote it with a company as aprimary when it shouldnt have been for one of 3 reasons.......that company was giving him an override on his commision, I get them all the time, he needed to write a policy with that company to win a bonus or a trip, or that company put him on a low production notice and he was given say 90 days to write 20 policies with them......thats happened to me before.
Just for some reason, I have a funny feeling about this, just my gut feeling
