Paying Client's Insurance - Helping Them Out or Illegal..

Oct 8, 2015

  1. insurance1822
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    insurance1822 Guru

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    So I have a good long term customer that has young children & the breadwinner lost his employment due to getting injured. They're facing penalties from the DMV if they don't reinstate their policy including fines & suspensions which will only make things worse. Their family is in tough times, they've always paid on time & they're GOOD people.

    I decided today to buy a money order to pay off their auto insurance for the year. All I told them was 'I'll take care of it..' and told them to call back later. When they call back I'll just say there's nothing due & leave it at that.

    Based off the commissions I've earned off them over the years, I'm still in the green. Ultimately in a 1 in 1,000,000,000 chance that somehow the DOI catches that..I'll just say what I did because I felt it was the right thing to do.

    As I re-quoted their insurance I realized that I could have redone their policy years ago & saved them money. I didn't do my job & cost them more money because of it by not reaching out for the rewrite. Now, it was the least I could do.

    That being said, do you think the DOI would legitimately penalize an agent for something like this? Have you guys ever done something like this?
     
  2. djs
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    djs Super Moderator Moderator

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    I think every good-hearted agent has done this to varying degrees. The trick is to not post it publicly that you did it though.

    You don't see this as much in P&C, but over the years, I've known several FE agents who would pay the first months premium to get the policy started, obviously going for the advance. This is clearly where the problems start, agents who benefit directly from the payment of premiums.

    Don't make a habit of it but you probably won't get convicted by a jury of your peers since you don't benefit financially on this.

    Dan
     
    djs, Oct 8, 2015
    #2
  3. Josh
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    Josh Retired Agent, Current List Broker

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    In most states it's both.
     
    Josh, Oct 8, 2015
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  4. Herkster
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    You paid it personally, or paid it out of the agency? We have quite a few policies that we agency bill, and then bill our insured directly. Have done it for years, nothing illegal about it. Now, paying it from you personal account is probably different, but who is going to find out?
     
  5. jdlash
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    jdlash Super Genius

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    It's always best to be professional and keep it business. You wouldn't pay every policy off that was setup for non pay, so I wouldn't choose to pay any of them. Why put your business and it's employees at risk for one individual?
     
    jdlash, Oct 8, 2015
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  6. TwoLabs
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    TwoLabs Super Genius

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    I've done this before. I don't see how it could be illegal if you do it personally? Whats to stop you from paying off their repair bill at the mechanic's shop vs their premium?

    Now if you go down to the mechanic's shop and use agency money to pay off their repair bill, then thats a different story.

    Is there some risk associated? Sure. But I'd say minimal.

    Kudos to you. I've done it before and will do it again under certain circumstances.
     
    TwoLabs, Oct 8, 2015
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  7. indienoise
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    indienoise Guru

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    I've done it for a friend of mine. He has a large family, and they've always been good friends to us, so when he lost his job then his car died, I found him a cheap car to get by with, bought it, and paid his first month's premium too. I wouldn't do it for just anybody, and it certainly was not a financially motivated move, what commission I made on that policy was peanuts vs. what I shelled out.

    I'd say tread carefully if you do it, it's pretty obvious what situations would or would not be gaming the system, but do what you can to keep it from being too obvious. In this particular case, it's kind of hard to track using cash I had on hand anyway and doing agency sweep for first payment.
     
  8. shawnmwalker
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    shawnmwalker Guru

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    I don't have an Opinion.

    I am simply in awe that INS1822 has a heart! I mean this changes everything!
     
    Last edited: Oct 8, 2015
  9. Heather
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    Heather Guru

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    I mentioned our neighbor was laid off and short on money to pay his cancellation, so my husband paid it for the guy. Next month he comes in the office says "I know I renew next month I will let you know if I am staying with you or not" I was speechless for sure. He stayed with us a few more months he cancelled for the 4th time a few weeks ago and I declined to re-write him.

    On a better note I have helped people before and they have paid me back, used cash to pay - no proof I paid it. I then kept the cash they paid me back here in the office if some one else needs help.
     
    Heather, Oct 8, 2015
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  10. AZDave
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    I'm with Shawn on this one!
     
    AZDave, Oct 8, 2015
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