Agent Commissions Chart

[FEX Quotes]

Sorry, I didn't take that from your question. Your original question seemed to suggest otherwise.

Anyway the answer your question is complicated to answer and deserves a thread of it's own, but essentially the answer lies within the property owner's prior useage of the property and/or future intent as to the disposition of the property.

With regard to the property in question in this thread, it seems clear that this property should have been written as a vacant property, or if he was doing some renovation work prior to sale, perhaps a builders risk..

No, substitution is fraud. I was questioning definitions, unoccupied vs. vacant.

 

[debshelp44]

An FYI for the OP - in Ohio, the FAIR plan pays lower commission than what I would get with a standard carrier. The only reason to go to the fair plan is because no one else will take it. A lot of agents I know won't write them.

I'm wondering if you would have been willing to pay the MUCH higher premium for a vacant house or if you were shopping for the cheapest rate. It's hard for me to believe that if this iis what you are doing for a living no one explained to you what insurance premiums should be. The agent may have written it wrong, but the owner is also responsible to some extent. He probably thought he was getting a "deal" with this guy and the agents who quoted him properly were trying to "rip him off". You hear that all the time in the P&C world.

 

[justaguy]

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?

Correct. This agent has written somewhere around 8-10 houses (including our REAL primary) per year for the last 5-6 years. He know exactly what we do as far as flipping them. The policy wasn't submitted to 2 other carriers for denial as per Fair Plans guidelines. He has also admitted in his sworn deposition that he knows we flip homes and that this was going to be sold. He also said he thought that primary residence and occupied meant that if ANYONE lived there (ie, renting it out) it would be their primary residence! I did sign the application, however the "well you signed it so tough" argument never holds up in court - I've seen it too many times when I was in the car business and customers said they didn't know what they were signing - they won pretty much everytime.

An FYI for the OP - in Ohio, the FAIR plan pays lower commission than what I would get with a standard carrier. The only reason to go to the fair plan is because no one else will take it. A lot of agents I know won't write them.

I'm wondering if you would have been willing to pay the MUCH higher premium for a vacant house or if you were shopping for the cheapest rate. It's hard for me to believe that if this iis what you are doing for a living no one explained to you what insurance premiums should be. The agent may have written it wrong, but the owner is also responsible to some extent. He probably thought he was getting a "deal" with this guy and the agents who quoted him properly were trying to "rip him off". You hear that all the time in the P&C world.

I'm well aware of the vacant policies and will pay whatever I need to. Why would I pay anything at all if I knew it wasn't going to payoff in case of a claim?

And to the poster who asked about the loan, yes it was a hard money loan for investors only.

Basically, my understanding is that in order to qualify for TX Fair Plan, it has to be denied by 2 other carriers - in this case it was never even submitted. So, does this mean that every other policy this agent has written (not just mine, but everyone) wasn't submitted for denial as required? Or was he just singling me out? Either way it seems he's in a bind. Otherwise, wouldn't that mean that every policy he has written (assuming he didn't actually submit for denial to 2 carriers) is a bogus policy that could not pay if Fair Plan finds out? I just don't see this going very well at court. Mediation is in August so we'll see what they say.

 

[pecosins]

Are you saying that you do not know the difference between primary home and vacant property when you sign the application as a full time real estate investor? Interesting argument.
Please inform us the outcome in Aug.

 

[VolAgent]

Are you saying that you do not know the difference between primary home and vacant property when you sign the application as a full time real estate investor? Interesting argument.
Please inform us the outcome in Aug.

I believe the argument is going to be, "I didn't read anything, I just signed where the agent told me to." Should be fun for all.

 

[djs]

Interesting. I'm curious to see how this turns out.

 

[Norwayguy]

Correct. This agent has written somewhere around 8-10 houses (including our REAL primary) per year for the last 5-6 years. He know exactly what we do as far as flipping them. The policy wasn't submitted to 2 other carriers for denial as per Fair Plans guidelines. He has also admitted in his sworn deposition that he knows we flip homes and that this was going to be sold. He also said he thought that primary residence and occupied meant that if ANYONE lived there (ie, renting it out) it would be their primary residence! I did sign the application, however the "well you signed it so tough" argument never holds up in court - I've seen it too many times when I was in the car business and customers said they didn't know what they were signing - they won pretty much everytime.



I'm well aware of the vacant policies and will pay whatever I need to. Why would I pay anything at all if I knew it wasn't going to payoff in case of a claim?

And to the poster who asked about the loan, yes it was a hard money loan for investors only.

Basically, my understanding is that in order to qualify for TX Fair Plan, it has to be denied by 2 other carriers - in this case it was never even submitted. So, does this mean that every other policy this agent has written (not just mine, but everyone) wasn't submitted for denial as required? Or was he just singling me out? Either way it seems he's in a bind. Otherwise, wouldn't that mean that every policy he has written (assuming he didn't actually submit for denial to 2 carriers) is a bogus policy that could not pay if Fair Plan finds out? I just don't see this going very well at court. Mediation is in August so we'll see what they say.

I'm assuming you have reviewed your existing policies that have been written by this agent.

 

[Guest]

I am Assuming you have had another agent write every one of your polices away from this guy?????

 

[djs]

Basically, my understanding is that in order to qualify for TX Fair Plan, it has to be denied by 2 other carriers - in this case it was never even submitted. So, does this mean that every other policy this agent has written (not just mine, but everyone) wasn't submitted for denial as required? Or was he just singling me out? Either way it seems he's in a bind. Otherwise, wouldn't that mean that every policy he has written (assuming he didn't actually submit for denial to 2 carriers) is a bogus policy that could not pay if Fair Plan finds out? I just don't see this going very well at court. Mediation is in August so we'll see what they say.

By the way, I doubt the issue of not submitting to 2 other carriers for denial is an issue for the claim. Don't know for sure, since I don't write in Texas, but usually that is simply a no-no for the agent, not a claim issue.

In addition, it's pretty easy to find 2 carriers where the risk doesn't match the underwriting guidelines. Chances are, he'll pass this requirement by showing 2 carriers that wouldn't accept the risk, even without submission. You probably don't have to physically submit them, just show they are not acceptable.

The issue is simply the house was vacant, which isn't acceptable to the Texas Fair Plan (or most fair plans).

Bottom line, don't hang your hat on the 2 denial thing. That's simply a distraction to the real issue. I'm sure the Fair Plan didn't deny the claim because the policy wasn't denied, they denied the claim for vacancy.

Dan

 

[VolAgent]

What is Fair Plan anyway?