Introduction
Chances are you are paying some form of insurance coverage, whether it is for your car, home, business, or even your life. Perhaps you have even decided to get coverage for all of these services and more. And if you are like most people, you probably don’t know how much commission your broker made for providing the insurance coverage. That’s because most people don’t ask!
History
It is simply considered socially unacceptable by most people to ask their broker insurance provider what percentage of the sale price is part of his commission. The subject of broker commissions is not brought up by most small and medium business owners when they are shopping for insurance either. In fact, you may be able to reduce substantially the price of your insurance if you can get your broker to lower his commission! This article will guide you through this process.
Features
Because the vast majority of insurance companies don’t sell their products or services directly to their customers, most people will use a broker insurance provider for getting insurance coverage. In fact, all of America’s top insurance providers only work with agents or brokers to sell their insurance to customers. You will not be able to deal directly with the insurance company at all, so you must get a broker insurance provider.
Fortunately for you, the law states that a broker insurance provider must fully disclose their commission when asked. Knowing the answer to how much your broker makes in commission is the first step in lowering your insurance quote.
That is why you should ask him how much he makes in commission, despite making you feel uncomfortable. In fact, this is precisely what large companies do! It is only the little guys, and small businesses that consider it unacceptable to request broker insurance commission disclosure. Of course, most brokers don’t exactly volunteer this information, so you must ask for it yourself!
Tips and Comments
As he is your broker insurance provider, you have the choice when it comes to how much commission he receives from your insurance plan. If they don’t like how much commission you are willing to accept, you can always get a broker that is willing to accept your offer! What percentage of a plan goes into commission normally depends on how large the plan is. Since the broker insurance provider is not working twice as hard to get a $20,000 plan as opposed to a $10,000 plan, it is not unusual to ask the broker to lower his commission percentage when higher priced insurance coverage is being discussed.
Also, the broker may have more or less work involved depending on the type of insurance that is being offered. Therefore it makes sense to offer a commission rate that is relative to the amount of work the broker is putting into your plan.
As you have learned, it is good practice to ask your insurance broker how much he is making in commission from your coverage. With this knowledge, you can begin to negotiate a lower commission percentage with your broker.
