Originally Posted by 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!!!
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.