How are insurance agents paid?


Hello everyone, and welcome to another episode
of the Murray Group Mailbag. My name is Ryan Hanley. I am the Director
of Marketing and Sales here at the Murray Group and our mailbag feature is
basically just quick videos where we answer one question submitted by
insurance consumers to either our website, Facebook page or email. And we just
figured that if one person has that question, we’re going to put it into
video and share it on YouTube and on our website, because we know that there’s
more people. If one person has that question, then we think that information
should be free and easily available. So if you have more questions,
be sure to check out the rest of our mailbag episodes. Today’s question comes from Joe, who is from
Glens Falls, which is about 45 minutes to an hour north of where I’m standing
right now. And Joe’s question is, “How are insurance agents paid?”
So a question I’m sure many of you have but maybe have not gotten up the
gumption to ask your insurance agent. So how are insurance agents paid? There’s
actually three ways that insurance agents are paid. The first would be a fee. Insurance agents
in New York City can charge a fee for their services. Now, I would tell
you that it’s not a very common practice, especially in the Albany capital
district area. Not many agencies charge an additional fee for their services.
If you are being charged a fee, you may want to ask your insurance agent
why. There are specific scenarios where, if you’re dealing with an
access lines carriers, there might be a fee charged for their services,
but that’s only in very particular situations, and I’m sure that your
insurance agent has explained to you what that fee is all about. The second is a commission, so this is the
most standard way that insurance agents are paid. A small portion of the premium
that you pay to the carrier is actually paid back to the insurance agent
in the form of a commission, most common way that an insurance agent is
paid. The third and final way that an insurance
agent can be paid is contingency. And contingencies are based on the individual
loss ratio, so how much business an insurance agent is riding with
a carrier versus how much money was actually paid out in losses. And based
on a specific contract that that insurance agent has with that specific carrier,
there can be an additional contingency payment or revenue brought into
the agency. So those are the three ways that insurance
agents can get paid and like I said, fee not real common, commissions most
common by far and contingencies is really on a case-by-case basis but Joe,
hope that answers your question. If you have any more questions, if you have
your own question that you’d like to submit to the Murray Group Mailbag
to be answered on a future episode, you can either leave it in the comments
below this video or you can visit our Facebook page at… just search
Murray Group on Facebook or you can email us at [email protected]
That’s [email protected], and submit your question
for the Murray Group Mailbag and I’ll be sure to make sure that
I answer it on a future episode. Thank you and have a great day.

4 comments

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