What auto insurance companies have the best commission structure?

Discussion in 'Auto Insurance Forum' started by Statewide Insurance, Apr 2, 2008.

  1. Statewide Insurance
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    Statewide Insurance New Member

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    I have be a captive agent for 3 years and now I am going to be opening my own brokerage. Does anyone know the commission structure for any auto companies? I heard they can negotiate the commission. Also is it true you can charge a brokers fee, if so what is the going rate? Thanks, this is the first of many posts. Great site for insurance info!!!
     
  2. djs
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    djs Super Moderator Moderator

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    Commission structure will vary, but it will be 10-14% both new business and renewals. Commercial auto may be a little less. Probably can't negotiate much up front, but if you do enough volume, you might get a better deal.

    Your responsbilities change if you charge a brokers fee. You have to have a brokers license, which may or may not be an issue depending on the state you are in. For instance, in California, they used to only have P&C brokers licenses, no agent licenses. I think that changed again this year, since they split up the licenses again (I didn't follow this, didn't impact me).

    I'm sure there are some regulations about brokers fees, I don't know about them, but whenever I point them out on somebodies policy, I just got new business. Makes it easy.

    Also, if you are acting as a broker, you work for the client, not the insurance company. No insurance company that I'm aware of will give you binding authority if you are a true broker charging broker fees. This can hurt you in the long run, depending on what market you are pursuing.

    Dan
     
  3. GreenSky
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    GreenSky Well-Known Member

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    Isn't it more important to find competitive products, rather than having the first concern being commissions?

    Haven't done P&C in 20 years so maybe the focus of what is important has changed.

    Rick
     
  4. djs
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    djs Super Moderator Moderator

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    Depends how good of a salesman you are :) Beyond that, you are absolutely correct. I'd rather get 10% of something that I can sell rather than 14% of something that won't sell.

    Namebrand recognition helps to. A lot of people buy State Farm, Allstate, Farmers, AAA simply because they know the name and feel confident the claim will get paid on a fair basis. They are not so sure about Joe's Pizza and Auto Insurance.

    Dan
     
  5. Insurance Phoenix
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    Insurance Phoenix Well-Known Member

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    Out of my 12 or so carriers all but one are "A" rated (the other is B+ the last time I checked). I try to place my clients with the carrier, whoever it is, that has the best rate. However, given a scenario where two carriers rates are identical why wouldn't an agent go with the carrier with the better commission structure? Unless you have some personal experience that a specific carrier stinks on some level, I suppose. But then why represent them.
     
  6. rocketboy
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    rocketboy Well-Known Member

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    Who do I need to go through to get a broker deal for selling auto insurance? Or do I need to get appointed with each individual company?
     
  7. Soaringagent
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    Soaringagent Well-Known Member

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    Well, you can subscribe to a wholesaler like Superior Access or you can maybe get appointments with each individual insurance company.
     
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