Is This Even Remotely Legal?

[PotentialFarmer]

Just got a spam email of random coupon stuff (similar to groupon I think but local city only) and saw an add for pay 2 months of your insurance and get the 3rd month free. This is in Southern California. I'm pretty sure this would be a kickback / rebate situation and illegal. Same thing has two other "Coupons" one Free SR-22 when you bring in this form and the other is 50 dollars off your next down payment when you bring in this coupon...seems pretty shady to me.

 

[xrac]

It is probably legal if it is the insurance company doing it. It is only illegal for the agent.

 

[AndreaSti]

It is probably legal if it is the insurance company doing it. It is only illegal for the agent.

They shouldn't be able to do it either then. Competing against their own agents if they do, kinda like health carriers. But at least the price is the same with health.

 

[Frank Stastny]

One needs to read the fine print. Bet there is a gimmick to it. Insurance companies don't give anything to anyone.

 

[Hefe]

Is it from an agent or a direct writer?

That's an interesting gimmick. $50 off seems like too much to offer unless you qualify it with a requirement for a home/auto package.

I saw an agency web site one time that offered 10% back if you transferred an existing policy with one of their carriers to their agency. Asked the marketing rep for that carrier what they thought. If I remember correctly, he said that rebating commission wasn't illegal in CA but that tactic was frowned upon by the carrier, especially going after broker of record changes.

 

[PDX_Agent]

Maybe the CA Agent is cutting his application fee by $50? I think in CA you can charge any amount of fee for an application fee on personal lines.

 

[Hefe]

Maybe the CA Agent is cutting his application fee by $50? I think in CA you can charge any amount of fee for an application fee on personal lines.

Not if you're directly appointed with the carrier. Those using GAs can charge broker fees...I'm not sure why people don't shop around enough to know that they can get the same product without the broker fee.

 

[Bertolinoins]

Maybe the CA Agent is cutting his application fee by $50? I think in CA you can charge any amount of fee for an application fee on personal lines.

That is my guess... a Cost U less type non standard agency that charge $300 broker fees on $225 6 months policies.