Possible Opportunity for Auto Ins. Agency

You will get a ton of non-standard customers. Non-standard business, for the most part, is not profitable for the companies, and agents as well. If you feed your companies unprofitable business, they will cancel your appointments quickly.

I don't think it will be a profitable venture, just my opinion though.
 
You are not going to get to many established P&C guys excited about this type of opportunity. On the other hand, I would guess you would write a LOT of policies. Keeping them past the first renewal might be a challenge though, which means you won't make any money. With low retention rates, you may run into problems getting your own appointments with carriers.

Set yourself up with something like Carousel Insurance Services Index and let your friend write the coverage for up to 30 days. You can make a couple of bucks with this if you want. This is 'spot delivery' type of insurance, doesn't go past 30 days but it covers the requirements for them to let the person drive away in the car.

You can then followup with the person to properly insure them.

This is the simplest process for everyone involved, including the car buyer (not necessarily the cheapest though).

Dan

By the way, there are a few other spot delivery companies, but this one works pretty well, simple system to use.
 
cool, thx dan. I called an agent that is well respected near here, he wasn't exactly thrilled about it either. I'm starting to think it's not a great business model. I may go and try it one time at the auction, just to see how this one time goes. Who knows.
 
I'm starting to think it's not a great business model. I may go and try it one time at the auction, just to see how this one time goes. Who knows.

I think it's a terrible business plan, but a fantastic component of one. If you're looking to get into the industry and your friend will let you go there a few times just to see what you can make of it then it certainly seems like it has potential. Maybe while people are waiting for their cars you can get them to shop their coverage anyway? Maybe it's just a good opportunity to get in front of people? Tough to say until you hop on, but if it's an industry you're going to get in anyway, I think you'd be silly to not work it.

Are there other auctions?

How many people are coming through there?

Are most of the folks there interested in just getting a cheap car or are some of the folks there doing it as a hobby?
 
I think it's a terrible business plan, but a fantastic component of one. If you're looking to get into the industry and your friend will let you go there a few times just to see what you can make of it then it certainly seems like it has potential. Maybe while people are waiting for their cars you can get them to shop their coverage anyway? Maybe it's just a good opportunity to get in front of people? Tough to say until you hop on, but if it's an industry you're going to get in anyway, I think you'd be silly to not work it.

Are there other auctions?

How many people are coming through there?

Are most of the folks there interested in just getting a cheap car or are some of the folks there doing it as a hobby?
Yes, you are right, it may be just one piece in a big puzzle. Yes, there is another huge auction right down the road, but it's more upper class. Like, dealers only for that auction. Yes, people come to this auction for hobby cars, and their own personal cars. Some of these folks - it is their first car, so they need coverage. Some... I don't know the numbers. Some. I could probably set up a desk the first time and kind of hang out, and see what happens, but I know for sure nothing will happen if I do not talk to people.
 
So, I ran into my buddy who owns the auction. I did not go to the Feb. auction, I asked him how many people did he think needed car ins.....he said 90!! Holy cow. But I told him some of you guys don't believe these numbers, so he said, "OK 50". The bottom line is, he really does not know if they have ins. or not, because he really does not ask. It's not really his job to ask, he's not an ins. guy- he sells cars. He wants me to go to the March auction, and just sit there at a desk, and take names, and survey the folks, and see who needs it. What do you guys think?
 
It's a safe bet that 25-30% of the cars he sells, go to individuals who do not have current insurance. Realistically, it's probably closer to 50%, but some won't care, they just want their car and to leave.

You can probably write a lot of policies, but the question is can you keep a lot of policies??? You won't have great retention, but that doesn't mean it isn't worthwhile.

If you are not locked into anything, it's probably worth a shot. For training? Might sound strange, but go buy an insurance policy and ask a lot of questions, then don't buy it at the end.

Dan
 
I think I may go to the auction, sit there with my phone, have my friend on call on the other end of the phone, who has an operating agency 100 miles away. If he's willing to take my calls on a saturday. I think he works saturday, I never asked him....
 
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