Charging a Fee for An Auto Insurance Policy

[Abraham Ramouni]

So I am a captive agent with a large carrier. I currently produce about 40 - 50 units a month. In Michigan Producers are not allowed to charge additional policy fees. Meaning I can charge an additional $20 per policy. Now if you get a counselor license you can charge for the consulting part of the transaction. I plan on opening a separate LLC and a different address. Also I plan on making an agreement that the customer signs as a part of the closing docs saying that they understand that the fee has nothing to do with the policy and is a fee charged by ( x ) LLC. I have not brought this up to my District Rep or the Legal team with my carrier. My Agency LLC will have no affiliation with the LLC, but the customer will be coming and purchasing a policy through my Agency LLC. The separate transaction will be billed from CC machine and receipt will be from the consulting LLC. Would my Large Carrier have a problem or cancel my contract because of a separate fee from a separate LLC. I plan on basically saying it's my second job or my weekend side job. Any advice?

 

[Al3x Lee]

The fact that you already feel sly about it should be a sign to err on the side of caution and not do it. Additionally, have you thought of the E&O implications of charging a fee? By charging a fee, you're changing the entire dynamic of your relationship with the insured.

 

[Abraham Ramouni]

I dont think I feel sly about it. With the cost of living along with inflation. I think a fee would be reasonable if its under $20. The nature is separate one is advice and pointing on where you are open to liability. One is for selling a new policy to fit your needs.

 

[Al3x Lee]

I dont think I feel sly about it.

So I am a captive agent

I have not brought this up to my District Rep or the Legal team with my carrier. My Agency LLC will have no affiliation with the LLC, but the customer will be coming and purchasing a policy through my Agency LLC. The separate transaction will be billed from CC machine and receipt will be from the consulting LLC.

I plan on basically saying it's my second job or my weekend side job.

You're a captive agent who hasn't ran this by the carrier you represent, and you plan on charging a fee through a non-affiliated LLC (Which sounds 100% affiliated if you're involved in the transaction through that LLC), and then you plan on saying it's your second job or weekend side job. Yeah. Not sly at all.

 

[whatyouwantfinally]

This is a ridiculous idea and you already know the carrier will care.

You're better off trying to get people to come into the office and having a tip jar on your desk.

 

[Abraham Ramouni]

appreciate the feedback!

 

[AZDave]

With the cost of living along with inflation

...and commission cuts

I was a captive for 22 years and seen some things or two. Guarantee your carrier would find out, that your contract does not allow for it, and they would say no.

Fee charging for auto - your company must have the rate, today anyway.

 

[Policy Monkey]

I have always wished I could charge a "Waste My Time" or PITA fee, but that's not legal in Florida. I think one of Al3x's first dictatorial decrees as National Insurance Czar should be to allow sliding scale pricing based on how difficult the client is.

 

[Markthebroker]

This is clearly a bad idea. The only way this could be any more obviously a bad idea is if you put "hold my beer" at the beginning of the post.

You obviously know it's a bad idea because instead of asking your carrier you ask us.

 

[Tahoe Ray]

This is a ridiculous idea and you already know the carrier will care.

You're better off trying to get people to come into the office and having a tip jar on your desk.

I wonder if I can work an ePay tip jar into my policy deliveries...lol.

Every business begs for tips so I'm just waiting for my bank to start asking for tips when I complete a transaction.