What auto insurance companies have the best commission structure?

[Statewide Insurance]

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!!!

 

[djs]

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!!!

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

 

[GreenSky]

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

 

[djs]

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

 

[Insurance Phoenix]

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

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.

 

[rocketboy]

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?

 

[Soaringagent]

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