How to Deal with Commiting to Farmers

[thekmeisterishere]

indienoise@ So are you suggesting for me to look into the possibility of maybe working as an agent, for a local agency's owners office? Or just work for a big 3 or big 4 agency as a 1099'er? I am trying to understand what you mean.

 

[Norwayguy]

Farmers have suffered huge losses due to recent climate issues. A survey of crop losses due to untimely rains and compensation according to its findings might be helpful.

What ARE you smoking?

 

[xrac]

What ARE you smoking?

It sure ain't tobacco.

 

[indienoise]

indienoise@ So are you suggesting for me to look into the possibility of maybe working as an agent, for a local agency's owners office? Or just work for a big 3 or big 4 agency as a 1099'er? I am trying to understand what you mean.

Well, are you wanting to stay with a captive company forever, or do you ever entertain thoughts of being independent? There's good and bad to both, but i would just recommend getting some experience before putting tens of thousands of your own money on the line. Know your short term AND long term goals, and get some experience in the appropriate setting before putting your neck on the line.

Bottom line is, it's a long shot to make it as a newbie on your own. You don't know what you don't know and you need someone to lean on at first.

 

[ShawnSIM]

They must not be as desperate in your area. They offered me a 3k draw and I was a restaurant manager at the time. As many have said, be very careful with Farmers. I never took the draw and only ended up writing a handful of P & C with them before I saw the writing on the wall. With that being said, there are good Farmers outfits that exist. They are just VERY few and FAR between. Don't sign anything without reading it thrice and don't alienate your natural market.

Best of luck OP

 

[blue_wynd]

indienoise@ So are you suggesting for me to look into the possibility of maybe working as an agent, for a local agency's owners office? Or just work for a big 3 or big 4 agency as a 1099'er? I am trying to understand what you mean.

Go with the end goal in mind. If you want to be independent, hook up with a local independent agency and negotiate something where you get to own a share of the book of business. Learn for a year or two, than open your own.

I recommend Nationwide if you want to go captive.

 

[OneInchPunch]

Here is some information. I don't know if it is current or not:



Be VERY careful. The fact that you refer to their subsidy program as "base pay" is evidence that you either do not understand their compensation plan or , more likely, that your DM did not explain it thoroughly to you.
Farmers DM's and recruiters are responding to just about every application on hotjobs, monster and all the other online employment services. They will accept almost anybody, regardless of their liklihood of succeeding in the insurance industry. They job depends of new blood.

2 major points, among many, that you need to be aware of.

1) The base pay is a subsidy program. Meaning that it is dependent on you hitting your quotas on a monthly/quarterly basis. Miss your quotas and not only will you probably be let go, you will also need to repay at least a portion of the payments that you received. This is will go on for 2 years. If you do not meet those requirements you will be required to pay back 50% of all subsidy payments received in the first 12 months, and 100% of those received in the second 12 months. It is not uncommon for a new agent to miss the quota, be terminated and owe Farmers thousands and thousands of dollars in subsidy re-payment.
Here is a link to the contract and subsidy agreement that you will be required to sign.

2) Regardless of what you are being told. YOU DO NOT OWN YOUR OWN BUSINESS. You only own the debt associated with the agency. Rent, phone, utilities, insurance, advertising, payroll are all YOUR obligations. However, Farmers can cancel your contract at any time, WITHOUT CAUSE, with a 90 day notice( Section C (1) of the contract ) and you are still responsible for those financial obligations. If you think they won't do that, ask agents in the Houston area. Farmers just cancelled amost 500 agent contracts there a few months ago. It should be apparent that when another entity can demand production quotas from you with the power to close your business if not met, or put you out of business for any other reason with 90 day notice, you do NOT own the business.

Can an individual still make a carreer with Farmers? Absolutely, but the game has changed substantially and is stacked against the agent. In many of its operating territories, Farmers is grossly uncompetitive, making meeting even minimum production quotas difficult, if not impossible.

Is #1 and #2 also true with opening your own State Farm agency?