GA for a Scratch Personal Lines Agency-Texas

[kingj3]

I am licensed less than a year, my business partner has been licensed for 20+years. He got out of business with a man about 2 years ago and has been working in a different industry. He and I are trying to get appointments through a GA and thought we had one until we saw their contract and if we ever go direct with a carrier we have to pay the GA the previous 12 months worth of commission within 30 days! Basically, they'd own us and we'd never be able to go direct without taking out a loan or some other undesirable means.

Can anyone recommend any GA's? Thanks in advance.

 

[djs]

I've never seen a GA (with the exception of Superior Access) that doesn't make you buy policies if you roll them to your own appointments. In this case, you are buying them for 1x commission, which isn't bad.

And no, you probably can't use Superior Access as your go to GA, they work well for niche stuff (somewhat), but not as your bread and butter carrier access.

A few questions to ask about your GA deal:
- If you get ANY direct appointments, does the buy out clause kick in or does it only apply to policies that you have with that particular carrier? If its only that one particular carrier, then you just gain them one at a time and deal with the pain (may still require a loan).

- Can you get appointments with carriers not accessible through the GA and not trigger this clause?

- Do you have other options? Can you get direct appointments up front without going through a GA?

- Does the GA provide enough offsetting benefits to earn their keep? Access to carriers you can't get direct appointments with is a good start. Keeping you out of high volume commitments is a huge help. Getting a profit sharing check that you wouldn't otherwise qualify for is awesome (2 way street on this one though). Discounted access to raters, management systems, etc alone can earn their keep.

There is no free lunch here. A GA needs to make money and if they are putting their reputation on the line for you to provide you access to carriers, they will want to get compensated. Its a pain and absolutely make sure you can live with the pre-nup, because someday, you'll want to divorce and this is what determines how that happens.

Also, are you looking at GA's or clusters? I think these terms get used interchangeably, but in my mind, there are differences. Most GA's don't offer binding authority where clusters do, though your initial start might be using the cluster as a GA, writing through them.

Dan

 

[PhilL]

I am licensed less than a year, my business partner has been licensed for 20+years. He got out of business with a man about 2 years ago and has been working in a different industry. He and I are trying to get appointments through a GA and thought we had one until we saw their contract and if we ever go direct with a carrier we have to pay the GA the previous 12 months worth of commission within 30 days! Basically, they'd own us and we'd never be able to go direct without taking out a loan or some other undesirable means.

Can anyone recommend any GA's? Thanks in advance.

KingJ3, I have some relevant thoughts for you if you want to contact me on Monday.

 

[kingj3]

I've never seen a GA (with the exception of Superior Access) that doesn't make you buy policies if you roll them to your own appointments. In this case, you are buying them for 1x commission, which isn't bad.

And no, you probably can't use Superior Access as your go to GA, they work well for niche stuff (somewhat), but not as your bread and butter carrier access.

A few questions to ask about your GA deal:
- If you get ANY direct appointments, does the buy out clause kick in or does it only apply to policies that you have with that particular carrier? If its only that one particular carrier, then you just gain them one at a time and deal with the pain (may still require a loan).

- Can you get appointments with carriers not accessible through the GA and not trigger this clause?

- Do you have other options? Can you get direct appointments up front without going through a GA?

- Does the GA provide enough offsetting benefits to earn their keep? Access to carriers you can't get direct appointments with is a good start. Keeping you out of high volume commitments is a huge help. Getting a profit sharing check that you wouldn't otherwise qualify for is awesome (2 way street on this one though). Discounted access to raters, management systems, etc alone can earn their keep.

There is no free lunch here. A GA needs to make money and if they are putting their reputation on the line for you to provide you access to carriers, they will want to get compensated. Its a pain and absolutely make sure you can live with the pre-nup, because someday, you'll want to divorce and this is what determines how that happens.

Also, are you looking at GA's or clusters? I think these terms get used interchangeably, but in my mind, there are differences. Most GA's don't offer binding authority where clusters do, though your initial start might be using the cluster as a GA, writing through them.

Dan

The buy out clause only applies to carriers we get from the GA. We can pursue other leads and get carriers outside of the GA. We can look for direct appointments with carriers, I think, because of my partner's previous experience, but there's no guarantee we'd get the markets that we want, through the GA it's almost guaranteed.

 

[kingj3]

KingJ3, I have some relevant thoughts for you if you want to contact me on Monday.

PM sent, I look forward to talking with you.