State Farm New Agent Contract / Brainwashing / Details
- Thread starter insurance1822
- Start date
- 11,997
I think that's where most of this hostility is coming from, that and your cheerful disposition.
You did give a much more thoughtful explanation than I expected and I'm sure there is a lot of truth in what you're saying. None of that however changes that people do in fact like to do business with companies they know and big captives invest a lot in branding and that's how it pays off.
A lot of what you listed (which again, is an impressive and well thought out list) doesn't matter to everyone. Some of it of your own admission isn't much different than any other carrier.
I don't think any captive agent believes they're the right fit for everyone. A lot of people don't have finished basements (my house is on a slab), so the backup limit doesn't necessarily matter. Should they tell people they have full coverage for their finished basement if there is a cap on it? Of course not, but it's quite the jump to assume that they're always lying to customers.
With respect to the deductible, a 1% minimum helps cut down on relatively small and administratively expensive claims so it helps them target out the type of risk they want so they can be competitive.
I'm not saying that SF is the right fit for everyone, but I think a lot of your hostility here is more about your temperament and previous experience than SF running around screwing everyone they do business with. Their new agent program lets agents get a pile of cash, salary, support, training, branding, and guidance to build a business and that is a heck of a lot better of a deal than starting off as an IA. All things being equal a SF agent knows a lot more about insurance after their training than an IA would have starting from scratch.
Different strokes.
- Thread starter
- #13
- 1,581
I know 2 older guys that have the largest SF offices around here & coincidentally we all frequented the same hole in the wall steakhouse for a few years before I moved. They would say the same thing that going scratch SF is borderline career suicide. Yes the top 1% will do OK, but that "cash" in the beginning is designed to help them avoid bankruptcy until their book is about 1MM.
To be clear, SF provides no free money (it's bonus money if they hit their numbers.) It's designed that if they don't hit their numbers, they won't be able to operate their business (unless they have a savings account they're draining.) After 3 years they're basically at scratch commissions living on their renewals & ongoing commissions. At that point (with their staffing requirement..) and rent & marketing expenses I see those guys making average money with difficult growth.
My issue is more w/ SF because this acquaintance of mine has (in my opinion) been criminally & fraudulently recruited into this position where clearly they have misrepresented the opportunity. I offered to match his salary & provide 12/12 new/renewal until his renewals match his salary + his share of the bonus & all my carriers. He literally thinks "why would anybody switch to *those* carriers" when talking about Donegal, Encompass, Travelers, Safeco & all my top notch companies.
To be that mis-understood & to not comprehend the insurance market he's getting into is scary. That's why I'm saying it's like actual brainwashing. He's like "I can be making $100,000 in 5 years.." as if that's some magical unattainable number anywhere else & only State Farm is the way to get there.
I do recognize that for some people they can make it work & be comfortable. I just eviscerate SF every time I run into them & I see this young vibrant guy w/ some money saved up going into this HARD industry just 100% clueless.
To be clear, SF provides no free money (it's bonus money if they hit their numbers.) It's designed that if they don't hit their numbers, they won't be able to operate their business (unless they have a savings account they're draining.) After 3 years they're basically at scratch commissions living on their renewals & ongoing commissions. At that point (with their staffing requirement..) and rent & marketing expenses I see those guys making average money with difficult growth.
My issue is more w/ SF because this acquaintance of mine has (in my opinion) been criminally & fraudulently recruited into this position where clearly they have misrepresented the opportunity. I offered to match his salary & provide 12/12 new/renewal until his renewals match his salary + his share of the bonus & all my carriers. He literally thinks "why would anybody switch to *those* carriers" when talking about Donegal, Encompass, Travelers, Safeco & all my top notch companies.
To be that mis-understood & to not comprehend the insurance market he's getting into is scary. That's why I'm saying it's like actual brainwashing. He's like "I can be making $100,000 in 5 years.." as if that's some magical unattainable number anywhere else & only State Farm is the way to get there.
I do recognize that for some people they can make it work & be comfortable. I just eviscerate SF every time I run into them & I see this young vibrant guy w/ some money saved up going into this HARD industry just 100% clueless.
- 11,997
That wasn't the deal that my father-in-law got. They paid him a pretty solid base for the first 12 months plus the bonus money. It was a LOT sweeter of a deal than I figured they'd give.
Between the options I agree with you 100%, IA is the way to go.
- 977
Here's something else I learned about State Farm you might want to keep in the back if your mind: if a vehicle is 10+ years or acv of 5k they WON'T list a lienholder, and their adjusters DO NOT practice due diligence ie procure copy of title or letter of guarantee before cutting a check.
Yes, the claimant ought to know better than to cash that check and spend the money if it's not theirs free and clear, but how many ignorant or dishonest people do you run into anymore? More often than not, people simply don't understand how the claims process works and can find themselves in a troublesome spot.
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I also agree that I see too many unethical business practices by captive agents, just so they can compete on price. Knowingly writing bad risks, doing bad or incomplete underwriting, and underinsuring clients. Not saying there aren't IA's doing the same thing, but there are captive agents out there doing this regularly just to survive.
Yes, the claimant ought to know better than to cash that check and spend the money if it's not theirs free and clear, but how many ignorant or dishonest people do you run into anymore? More often than not, people simply don't understand how the claims process works and can find themselves in a troublesome spot.
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I also agree that I see too many unethical business practices by captive agents, just so they can compete on price. Knowingly writing bad risks, doing bad or incomplete underwriting, and underinsuring clients. Not saying there aren't IA's doing the same thing, but there are captive agents out there doing this regularly just to survive.
I hired a producer from State Farm six months ago he was making 25 maybe 30 K year and he was doing 98% of the policies. He is on pace to make almost 80k with us this year and he works from home. I just hired another one from State Farm that I think would be even better.
Andle
Expert
Insurance1822 - Reading your posts gets me fired up! You should be a demotivation/motivational speaker, depending on the crowd. Back to writing Garbage products that people just gobble up.
abkclauren
Expert
- 41
Yupp. I'm always 400 to 1200 less on autos and home together.
Receive direct mailers from two different SF agents yesterday. It was the same advertisement with different names. Those agents are approximately two miles apart and are about 5-7 miles from me. However, there are 3 other SF agent within about two miles from my house. Looks like they are falling all over each other. We have an area population of about 150k and 18 SF offices.
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- 1,506
I am just about ready to Co Author a book with Ins 1832.
Ch 1: Shoot first ask questions later. We'll use the dead dog story.
Ch 2: Mortgage brokers are the key. We'll use a mix of our stories.
Ch 3: Offend every one. Like Tosh O. Noting is sacred. The Pros and Cons
Ch 4: Captive vs Indy....
Ch 5: The day to day
Ch6: Ins 1833 doesn't know everything, that's why he's here asking great question.
Ch7: The next level.
Ch8: Want to win long term, Own!
Ch9: The Grind.
Ch 10 This is Sales. You will have to SELL something!
Ch 11: Navigating your carrier relationships- I'll have to write this ch because Ins1324 thinks there is no purpose in this and that they are all "scum bags".... We'll have his comments along the edges in this ch.
Etc Etc.
Ch 1: Shoot first ask questions later. We'll use the dead dog story.
Ch 2: Mortgage brokers are the key. We'll use a mix of our stories.
Ch 3: Offend every one. Like Tosh O. Noting is sacred. The Pros and Cons
Ch 4: Captive vs Indy....
Ch 5: The day to day
Ch6: Ins 1833 doesn't know everything, that's why he's here asking great question.
Ch7: The next level.
Ch8: Want to win long term, Own!
Ch9: The Grind.
Ch 10 This is Sales. You will have to SELL something!
Ch 11: Navigating your carrier relationships- I'll have to write this ch because Ins1324 thinks there is no purpose in this and that they are all "scum bags".... We'll have his comments along the edges in this ch.
Etc Etc.
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