Please Need YOUR Advice.

[PhilL]

Michael, By IMO, am I correct to assume that you are referring to an Insurance Marketing Organization? I would be glad to talk to you, if you would like some relevant thoughts. My phone number is on my website.

I really appreciate your sincere answer, I'm considering having an attorney draft the paperwork, I had a client of mine that used to be a Life & P&C agent for many years outside of Florida and is retired now, he mentioned why not try to join a cluster or IMO for P&C etc (I might be spelling these wrong) That way I don't answer to someone else and my name is on the business, I'm responsible for the whole operation of the agency.

He also mentioned since I'm also a 2-15 life licensed, why not get appointed directly thru the life and health carriers, that way is also 100% mine. These options seemed pretty good. I just don't know where to start or if any member on the board is a IMO etc.

My goal is to write about $50k in premium a month, a combination of auto, home and life, I currently produce around $40k but I'm restricted too much by not only limited number of products, but also the CA that I work for. Is this goal reasonable as an IA?
As always any input is greatly appreciated.

 

[TwiLight]

No CSR, I have to handle and service all of my clients, the agreement with both is" if it's your client and you sold a product, you service it. I will eventually have to bring in an exprience CSR.(I already have a person in mind that would like to work with me.)
I saw in the forums E&O for less for P&C and Life aprox $ 751 + $ 495= $1,246 I also saw NAPA (not the auto parts store) about $1,500 Both seem to limit companies I can use and exclude certain coverages. I would like an E&O that I can do P&C, Life, Health and Commercial liability. Can anyone please suggest a company or two and an idea approximately how much I can expect
to pay, of course it has to be a company that the carriers accept.
As always I appreciate all your honest answers, the good with the bad.
Thanks.
Michael.

I would not use the E&O from the forum for the long haul. It is not an agency policy, only covers the individual at that price. You will want an agency policy that covers your CSR's and agency producers. $2k to start is realistic.

Start off by joining your State's Big I....you will need at least one direct appointment for P&C to join in most cases. They have a reasonably priced program that you should be able to get E&O from. They will also be able to assist you in the contract interpretation from the agency and/or point you to a good attorney to broker the agreement so as to get a company to recognize the agreement when you move.

Now both agent offers are a bit one sided as to the renewals. There is a reason for this......The most important is that you are unlikely to be able to get a contract with all the same carriers of that agency so that you can move the business to your agency. You will be forced to roll the business to a new company. (alot of work in this approach) but it is doable. Remember, you are in Florida.....P&C appointments are rare on your own.

Second, there is no reason to involve the P&C business with the Life/Health business. You can get an appointment with almost any Life/Health carrier without having to split the business with the agency. So be specific and only include P&C in your negotiation. You could contract directly with an IMO/FMO to get solid contracts for Life/Health business.

 

[MichaelQ]

Phil & Twilight, I appreciate your answers, Great info. If I decided to go at it by myself, what would be the best way for me to write P&C? joining something like a cluster or alliance or something like that? of course I'm looking to keep the cost down and it will be a 1 person operation, at least in the beginning.

 

[TwiLight]

Phil & Twilight, I appreciate your answers, Great info. If I decided to go at it by myself, what would be the best way for me to write P&C? joining something like a cluster or alliance or something like that? of course I'm looking to keep the cost down and it will be a 1 person operation, at least in the beginning.

The obvious answer is to join a Cluster Group. Start out by talking with your State Big I association. They are always on your side and can give you some good advise.

When negotiating a Cluster agreement, the main issue before the split is the ownership of the business and expiration dates. Binding authority is next and direct appointments to the carrier. Look at splits from the 2/3 - 1/3 amounts in your favor. This is a fair split for a newby and will help pay for some basic training from the cluster.

Build your business up to $500k Personal Lines and $250k Commercial your first 2 years. That is a hefty goal, and alot of work. Anything less and you WILL fail in this business.

So pick up your boots and leave your life behind you. Starting an agency is your life the first couple years.

You should also have at least 6mos of your expenses in the bank to live on and a marketing budget of about $1-2K per month. You will need to investigate internet leads and that will come out of the marketing budget. Also, hit up every mouth breather you know for a shot at their business.

Did I scare you yet??? The rewards are great for those willing to work for it.

 

[MichaelQ]

Not scared at all, actually very excited to start on this new journey. I have the savings ready, I also wont start blind, I have over 100 of my current clients that I brought in, such as friends, family old clients etc, that want me to quote their P&C once I open shop, I do not have a any type non compete clause with the current agent. I will not be raiding her clients, but I will quote all my friends and families that I brought in. My monthly average is about 40k in premium, so I figure I could do better since I won't have any of the current restrictions by the CA and the limited products available. Any cluster that you can advise me to keep away from? Thank you for this information, it gets me a step closer to opening my own agency, I would love to be ready to open my doors by Jan 1st 2014.

 

[AdvisorsIns]

Let me know if I might be a resource to you. I worked for SF for 4 years and split off to open a scratch P&C agency March of 2012. I worked from home for the first year and just hit a 1 million book of business last week. I have recently been through all your questions. Give me a call sometime. 864-509-0009. I will be more than happy to share my successes and what i would do differently. Miles

 

[PhilL]

Not scared at all, actually very excited to start on this new journey. I have the savings ready, I also wont start blind, I have over 100 of my current clients that I brought in, such as friends, family old clients etc, that want me to quote their P&C once I open shop, I do not have a any type non compete clause with the current agent. I will not be raiding her clients, but I will quote all my friends and families that I brought in. My monthly average is about 40k in premium, so I figure I could do better since I won't have any of the current restrictions by the CA and the limited products available. Any cluster that you can advise me to keep away from? Thank you for this information, it gets me a step closer to opening my own agency, I would love to be ready to open my doors by Jan 1st 2014.

Michael, We may have spoken but if not and you want some additional thoughts about your P&C plans, please feel free to contact me through my website. I am glad to try to help you.

 

[oldinsuranceguy]

The cheap E&O coverage is usually for a group policy which will not insure businesses, only individuals. You should also read their specimen policy to make sure that the P&C lines of business you plan on writing are not excluded.

If you want your own E&O policy (not a group policy) the cost for P&C agents (including your life and health products) usually starts at around $1,200 if you've been licensed at least 3 years and $2,000 if you've been licensed less than 3 years.