Thinking about P/C

k1s1h1

Expert
40
I own my own agency. Its just me and my dad. We sell life, health and securities. I am thinking about adding on PC. I would like to know how the commissions are paid on auto and home owners. Is it similar to health were they pay 20% of the premium. Is it a good thing to get into or is it more trouble then it is worth.
 
Depending on the state and the carrier, home and auto pay between 8 and 20 percent, with the majority between 10-14%. Auto tends to pay the same on new business as on renewals, homeowners pays a bit higher on new business.

You'll write far more P&C than you do health. It's much easier to write, since it's required not only by most states, but also by things that most people find much more powerful, the bank who owns your car and house.

P&C is a service nightmare, so you tend to need to have enough of it to make it worth having someone to deal with the billing / service issues. Remember, someone buys a new car, you have to change the policy, someone refinances their house, it's a policy change, someone gets into an accident, they call you to get the claims number, etc, etc.

The nice things about P&C are:
- quick sale. people buy it or they don't. In perspective, people will put off decisions about health insurance, but they buy P&C now.
- Grows book of business to help cross-sell. Most of my health clients are my P&C clients first.
- Provides more stable income. Health pays renewals, but not as well, and an individuals book of business tends to be smaller, meaning you usually have to continue to write new business.
- Since you're doing financial stuff anyway, it allows you to offer a more complete package to your clients. You can not only grow their money, but you can help protect the things important to them that they already have.
- You'll easily write 5 P&C households for every health household.

Is it a good idea? If you are sitting around with time on your hands, or the capacity to grow your agency, it is something worth looking into. On the other hand, if you are having trouble following up all of your leads now, then it will hinder you, not help.

Oh yeah, P&C is a bit more pricey to get into than health. Not sure why this is, but it starts with your E&O coverage going through the roof, and continues with needing to have access to ACCORD forms, and then onto agency management software. It's not outrageous, but it does add up.

Dan

P.S. If you are in California, I highly recommend staying out of the P&C business. I've written it all, nothing left for you :D:D
 
Hey thinks for the good post. I am in Louisiana so think there are still a few cases. The only thing that is holding me back is i have to sit through another 40 hour class. I just need to find the time.
 
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