Need Company to Write P&C for
- Thread starter jrf1711
- Start date
- 1,076
Buy some E&O and get appointed with progressive, they are easy to get appointed with. For what you will be doing, they might be the only carrier you need to get started.
I agree. You have access to an awesome referral source, albeit with some issues. If you handle this right, you will do well.
I do recommend trying to add a few other carriers once you have Progressive in place. You'll probably need to find a few non-standard carriers to deal with some of the drivers, just to give some options. No rush, just over time.
Things to watch for:
- Retention rates will be low. Find out how many cars are brought back (or lost) and you'll start to get a sense of retention. Your retention rate will be lower than the retention rate of deals though, since some will go elsewhere.
- Billing issues. Yes, this may come as a shock, but people who buy at buy here pay here lots tend to not pay their bills on time.
- Claims. You will have a number of claims to deal with. Truthfully, the claims don't take much of your time, but it does negatively impact your loss ratios, something you will want to watch over time. Plus, claims do take some time.
- Service work. Don't know why, but you will find much more service work needs to be done on these policies. At some point, you'll need to hire someone to deal with this and chasing people to pay their bill.
If you add a few more dealerships to your referral source, you can have a totally awesome business going!!!!
Dan
I do recommend trying to add a few other carriers once you have Progressive in place. You'll probably need to find a few non-standard carriers to deal with some of the drivers, just to give some options. No rush, just over time.
Things to watch for:
- Retention rates will be low. Find out how many cars are brought back (or lost) and you'll start to get a sense of retention. Your retention rate will be lower than the retention rate of deals though, since some will go elsewhere.
- Billing issues. Yes, this may come as a shock, but people who buy at buy here pay here lots tend to not pay their bills on time.
- Claims. You will have a number of claims to deal with. Truthfully, the claims don't take much of your time, but it does negatively impact your loss ratios, something you will want to watch over time. Plus, claims do take some time.
- Service work. Don't know why, but you will find much more service work needs to be done on these policies. At some point, you'll need to hire someone to deal with this and chasing people to pay their bill.
If you add a few more dealerships to your referral source, you can have a totally awesome business going!!!!
Dan
- 1,076
Good advice. I would also charge broker fees (if state allows) and sign everybody up for EFT so the money is coming directly out of their account. I spoke to a manager of a local Cost U Less office about their retention... their annual retention is about 35% which is really, really low. They make their money off of broker fees... writing and re writing the same accounts over and over again with the standard $100 fee on it.
G
Guest
Guest
I would sign up with mainly substandard carriers as you wont have to deal with chargebacks since most are paid as earned,
This will cause you less of a headache.
Keep progressive as they have standard and sub-standard, but you will be dealing with billing issues and chargebacks,
Do you even know what a chargeback is?
This will cause you less of a headache.
Keep progressive as they have standard and sub-standard, but you will be dealing with billing issues and chargebacks,
Do you even know what a chargeback is?
- 191
I would definitely add policy fee's if you can in your state. The service work with this type of client can quickly become overwhelming as well.
- 325
If you can't add on a "broker fee" I can see this quickly becoming more of a hassle than you can imagine. The charge backs will be staggering.
I'd have the following carriers:
Progressive - for your "better" clients
Mendota - for those high risk folks that have an MVR that looks like a basketball score
Viking / Dairyland- for those who think that paying bills is for suckas. They are a "pay to play" company. You get your ID cards one month at a time as you pay your bill.
Again, you need to get as much "upfront" $$ from these folks as possible.
RW
I'd have the following carriers:
Progressive - for your "better" clients
Mendota - for those high risk folks that have an MVR that looks like a basketball score
Viking / Dairyland- for those who think that paying bills is for suckas. They are a "pay to play" company. You get your ID cards one month at a time as you pay your bill.
Again, you need to get as much "upfront" $$ from these folks as possible.
RW
G
Guest
Guest
I would also MAKE them pay by EFT, is you do direct bill, they will never make a payment, and try hard to make them pay in full.
- 325
Legal in your state to have the first year of insurance rolled into the car financing?
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- #10
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