Possible Opportunity for Auto Ins. Agency

[HomeService]

I have been selling life insurance for 25 years off and on. A friend of mine has this large auto auction. He also sells used cars as a dealer. He told maybe he had an opportunity for me to open an agency in there, and basically sell to the people buying the cars. He has an open desk, we don't have a rent plan worked out yet. The auction is only one Saturday a month, but he said I could sell out of there all the time, the rest of the month as well. Now, I just got licensed with P&C a year ago because I have been a life agent and one of my life companies was going to have me sell renter's ins. so I got the license, but never have written anything. However, I know a life guy in my same shoes, who took his P&C and ran with it and opened an agency about 100 or so miles away. I called him, he said he could hook me up with carriers. I really would want him to show me the ropes if possible. What do you guys think?

 

[JCK818]

Sounds like a plan. Make sure you are prepaired though. P&C is a bit harder than L&H.

 

[HomeService]

I am totally not prepared at all. My buddy 100 miles away did not sound too keen on coming here to help-can't really blame him, he is busy... there are two local car agencies, though within ten miles of here, indy places, I thought about asking them if I could work under them somehow while I learned the ropes. I am definately not ready to just jump right in there -all alone.

 

[Josh]

Forgive me, but I have to ask the stupid question.

What are you basing your belief that this will be successful on? Are there a variety of folks there looking to buy insurance for the car they just bought or will most of them already have their coverage? In my admittedly limited experience with car dealers and auto auctions it doesn't really strike me as the type of place where folks will be looking for insurance. For example, I bought a new car a few months ago and when I left the dealer they put temp tags on it and I already had my insurance so I just stayed with who I had.

What is the hook for someone to work with you? What is going to make that an ideal selling scenario? Have you considered going to the auction once or twice just to see what the lay of the land is?

Maybe it's a wonderful idea and things will go well and this is the most wonderful opportunity you've been offered, that's all entirely possible, but those are some concerns I would have were I in your situation.

 

[Hefe]

I agree with all of MedicarePlanSolutions' points. I have many auto clients that buy new cars all the time and not once in the last 3 years has one used that as an opportunity to leave me.

Also, the car auctions around here are mostly dealers and/or large quantity buyers that are shipping them out of town. Neither of those are appropriate to insure on a personal lines auto policy.

You may get a handful of people that came in to buy their first car but that's not enough to keep you busy.

 

[Insurance-Guy]

You may get a handful of people that came in to buy their first car but that's not enough to keep you busy.

This is true and the rest of what you will get will be junk. You will have people that will buy cars get insurance then cancel because they can't get tags or the are buying and selling the cars themselves. It is IMHO a terrible idea. Ask your friend how many times does he run into a person who buys a car that he can't put a temp tag on because of insurance? Then you also have to figure the increase in your E and O...service work...Etc.

 

[HomeService]

This is true and the rest of what you will get will be junk. You will have people that will buy cars get insurance then cancel because they can't get tags or the are buying and selling the cars themselves. It is IMHO a terrible idea. Ask your friend how many times does he run into a person who buys a car that he can't put a temp tag on because of insurance? Then you also have to figure the increase in your E and O...service work...Etc.

This is what I'm worried about. Yes, I've been to my friend's auction and I do know the lay of the land. The buyer goes in the office, sits down with the title lady, gives her cash- at the end of the day, when he's ready to check out. Some of the guys drive the cars off the lot, some of them need car insurance. All will need to get car insurance before they inspect these cars, and my friend wants to make an inspection station right there at his auction, so he wants a one stop shop, buy the car, get it insured and inspected, go and drive it away. He said to this point he has told a few people to just go to the local agency, get it insured and then come back, ge tthe car, get it inspected off his lot, blah blah... He said he does tell quite a few to get it insured, and he really wants somebody on premises to do it, but the numbers who need it- I have no idea. Keep in mind also these are kind of lower income clients, a lot of them. $1000 cars and cheaper. And I don't speak spanish and the clientelle is definately 80% or more spanish speaking. However, my contact with the car insurance industry, the guy 100 miles away, he definately speaks spanish.

 

[b61mack]

you should offer your friend a piece of the business deal.. that gives him the insentive to help you get going.. you will be exposed to hundreds of potenial clients.. you may also want to check out fiesta auto insurance. they are a franchise, that caters to the spanish market. i think they maybe on this fourm. i think it is a good opportunity. go for it...

 

[Hefe]

A lot of $1000 cars and cheaper? Now you're going to be selling a lot of liability only policies for pennies and having them cancel. I don't mean to stereotype but people buying $1000 cars aren't usually homeowners so the possibility of cross selling is low.

If you can't communicate with 80% of the clientele, you won't be able to sell them insurance.

If they're large dealers with an agency, they likely have a policy in place that provides them with automatic coverage.

I think there are too many factors working against you. I would rather set up an insurance desk in an escrow office to bind homeowner policies and cross sell auto.

 

[HomeService]

A lot of $1000 cars and cheaper? Now you're going to be selling a lot of liability only policies for pennies and having them cancel. I don't mean to stereotype but people buying $1000 cars aren't usually homeowners so the possibility of cross selling is low.

If you can't communicate with 80% of the clientele, you won't be able to sell them insurance.

If they're large dealers with an agency, they likely have a policy in place that provides them with automatic coverage.

I think there are too many factors working against you. I would rather set up an insurance desk in an escrow office to bind homeowner policies and cross sell auto.

Keep in mind I live in kind of a poor area in south central TX and a lot of spanish speakers- and I'm a debit guy so it's fine with me, I actually love the lower income markets, that's what I like. However, not everyone at this auction is poor, there are some dealers and such. And, there are a few $3000- $5000 cars, and the dealer is selling at other times as well, outside of the auction, selling on eBay and such. That auction is only once a month.