Archives for insurance agents

George Washington From Dollar BillInsurance agents provide valuable services for their clients.It is important that they stay financially healthy to be able to continue to provide those services.

On many transactions the commission paid by the carrier provides adequate resources for the agency. On others, though, a reasonable Agency Fee is both necessary and appropriate, as the Texas Insurance Code has made clear since 2005:

§ 4005.003. FEES. (a) A general property and casualty agent may charge a client a fee to reimburse the agent for costs the agent incurred in obtaining a motor vehicle record or photograph of property described under Section 4005.002. The fee may not exceed the actual costs to the agent.

(b) For services provided to a client, a general property and casualty agent may charge a reasonable fee, including a fee for: (1) special delivery or postal charges; (2) printing or reproduction costs; (3) electronic mail costs; (4) telephone transmission costs; and (5) similar costs that the agent incurs on behalf of the client.

(c) A general property and casualty agent may charge a client a fee under this section only if, before the agent incurs an expense for the client, the agent: (1) notifies the client of the agent’s fee; and (2) obtains the client’s written consent for each fee to be charged.

At iMGA we’re constantly looking for ways to make life easier for agents. One of the ways we do that is by fully supporting Agency Fee collection and compliance in our Dwelling, Homeowners, MobileHome, Renters and Vacant programs.

If you enter the amount of an Agency Fee when submitting a policy, we’ll:

  • Disclose the fee on the application and on the declarations page,
  • Include the fee in the calculated down payment amount,
  • Calculate, collect and remit the surplus lines tax and stamping fee on the agency fee, and
  • Collect the Agency Fee and include it in your next monthly commission payment.

Any future renewals will also include the agency fee, including its repeated disclosure on the declarations page.

Simply have the insured sign the iMGA application with disclosure wording (or your own fee disclosure form) for your records and you’ll be in full compliance.

Daniel Schwarcz, a University of Minnesota Law School associate professor and the author of an 88-page study scheduled to be published early next year in the University of Chicago Law Review, says homeowners policies differ “radically with respect to numerous important coverage provisions.”

Professor Schwarcz found that “all five companies with substantially less generous policies” use captive agents (like State Farm, Allstate and Farmers) but “two of the three carriers providing the most generous policy forms use independent agents”.

The study concluded that consumers are most likely to be harmed by potential differences in homeowners coverage “if those consumers do not have access to an intermediary that is informed about these differences.”  Also that “Captive agents… are substantially more likely than independent agents” to be unable or unwilling to offer consumers coverage alternatives.

In other words, it’s really important to have a good independent agent.

At iMGA we couldn’t agree more. We’re proud to offer fantastic coverage options most companies don’t, but that’s not helpful without great independent agents who care enough about their clients to make sure those clients are well covered.

Fortunately we have those – spread all over Texas.

Consumers: Find a great agent to work with on insurance for you home or rental dwelling.

Agents: Work with a company that appreciates the value you bring to your clients.

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