Can an insurance agent make more commission by raising your premium?

  • by Bernard
  • Nov 03,2015
  • 11 answers

Can an insurance agent make more commission by raising your premium?


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Insurance Answers (11)

jmm2112 6 months ago

The agent has no control over a policy's premium. He/she can, however, try to talk you into a specific policy. YOU need to determine what your insurance needs are - and then see what products the agent can offer to satisfy those needs.

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tro 6 months ago

the agent has no control over your premium, he is working for the company and each company has their own schedules depending on what coverage you want
his fee is set by the company, who pays him, he doesn't get his fee from you

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Insurance Pickle.com 6 months ago

You should always buy the plan that makes sense, and most agents will be doing that. Health insurance commissions are almost entirely per head now. Meaning if you buy something that's $100/month or $500/month, the compensation is the same.
Other than that, in many cases it's a percentage of the premium, yes.

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StephenWeinstein 6 months ago

Not exactly.
An insurance agent cannot raise your premium.
An insurance agent can make more commission if the insurance company (not the agent) raises your premium.
An insurance agent can make more commission by convincing (or tricking) you to switch to an insurance plan that has higher premiums.
But an insurance agent cannot raise the premium or the insurance that you already have.

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mbrcatz 6 months ago

That's several questions.
1. Does an insurance agent make more money, when the premium goes up? Yes. Commission is usually a flat percentage of the premium. When the premium dollar goes up, the commission dollar goes up.
2. Do commission rates go up when the premium dollars go up? No. It's mostly flat, except with workers compensation - and as the premium for WC goes up, the commission actually goes DOWN.
3. Does the agent have any control over the premiums? For personal insurance and life/accident health insurance, no. For large commercial accounts - if you're paying more than six figures in premiums - the agent can negotiate some of the premiums on your behalf. That negotiation legally cannot include INCREASING their commission, or DECREASING the commission. They can, however, WAIVE their commissions, IF they charge you a fee instead. The exact procedure on this varies from state to state, and a few states allow commission and fees to be charged.
None of that applies to your car insurance or house insurance, though. The rates "are what they are".

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Judy 6 months ago

by selling you additional coverages, yes. The aagent doesn't determine what the premiums are.

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Bill 6 months ago

It is the company's underwriters that set the premium rates, not the agent.

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DR + Mrs Bears face 6 months ago

Probably not because you would get a cheaper quote elsewhere so he would get no commission from at all.

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Joel Gardberg 6 months ago

You need to be making the payments to the ins co, not the agent. Agents are not supposed to take your money into their account. Very risky for the client.

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Prepper World Bob 6 months ago

he has no control over the premium and if the premium is too high, the customer will just try a different insurance company

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Casey Y 6 months ago

Use some logic here. If commission is a percentage of premium (which it is in most cases), then they would make more money by raising your premium. However, there are a couple of issues.
1. If I raise your premium too much, I wont be offering the most competitive option. If you shop, I will lose.
2. Different companies offer different commission levels. If you have lots of claims and I need to double your premium by placing you with a high risk company, my commission level will end up reduced and I'll probably make around the same amount.
3. For almost all consumer products (Homeowners, Auto, Life, Disability, Etc.), there is absolutely no mechanism for your rate to be varied based on the agent's input. Its a consumer protection issue.
4. On the commercial insurance side, we usually have a little bit of wiggle room and can request credits or debits on the rating. Again though, I want to credit enough to maintain the business or debit enough not to lose it. With the competition in the current marketplace though, if you aren't offering your best offer, you probably aren't getting the business.
If you think your agent is overcharging, find another agent. My clients trust me as they would their attorney or accountant, just another professional...

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