Personal/Commercial Insurance Direct
Insurance Agents are compensated with commissions and few understand how it works. As a B Corp we value disclosure. For most products - auto, home, commercial insurance, etc. we receive an up front commission of 8-15% and receive that same commission each time the insurance policy renews. If a policy is cancelled mid-term we are charged back any portion of the commission we were paid up front that we essentially did not earn. Many independent agents like us are set up with an affiliate/aggregator that provides us instant access to carriers. We are set up with Avenue Insurance and Chambers Bay Insurance to allow us carriers for the west coast. These affiliates take a percentage or a flat fee. Our current setup is they are taking 20% off the top of the 9-15% we receive until that exceeds $1,000/month on average then we will switch to the flat $1,000/month option.
Insurance companies often have gimmicks to incentivize agents to set up new insurance policies with them vs. other carriers. This can look like increased commission percentages or cash incentives based on quotes or sold policies.
Our practice is to delete these marketing emails to not be biased to any particular carrier. When we run personal insurance comparisons this allows us to just focus on the best pricing and coverage for our clients instead of factoring different companies commission structures.
Some carriers also provide quarterly or annual bonuses based on production and loss ratios (how many claims we have in our book of business compared to the amount of premiums collected.) We also do not take these into consideration when viewing comparisons among companies.
HERE is a current listing of commissions so you may get a concept of how this works.
Non-admitted/Excess and Surplus Commercial Insurance
These policies disclose our commission on the proposal and is a percentage of the pure premium, not including taxes and fees. It's usually 9-15%. Some of these carriers we have access through Avenue Insurance and others we are set up with directly so we are not sharing 20% of the 9-15% with Avenue or Chambers Bay Insurance.