Insurance Agency Fees

What is an agency fee and should you pay it?

Not all states will allow Insurance agencies to charge an additional agency fee. Texas does. It is not mandatory, but many agents do charge them. So you should know the rules about charging agency fees. The Texas Insurance Code states:

Sec. 4005.003.  FEES.  (a)  A general property and casualty agent or personal lines 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 property and casualty agent described by Subsection (a) 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 property and casualty agent described by Subsection (a) 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.

Blah, Blah, Blah -right? Let's break it down a little. It states in (a) that an agent may charge a fee as reimbursement for costs incurred for a motor vehicle report or a property photo. The fee may not exceed the cost incurred. In (b) it states the agent may also charge  a reasonable fee for various costs (listed) and in (c) it states an agent can only charge these fees if they notify the client of the fee and obtain written consent for each fee.
Before you agree to pay an "agency" fee, please make sure the agent has fulfilled the above listed obligations. You can refuse to pay the fee if they have not. Ask what services you are paying for.
   Also- keep in mind you will pay a policy fee to the carrier. These are non refundable and non negotiable. Many independent agents I know do NOT charge an agency fee on top of the policy fee. Agents receive commissions designated by the carriers. These commissions are based on the premium minus the policy fee. In other words we do not make money off of the carrier's policy fee. This is the reason some independent agencies do charge their own agency fee to replace the fee the carrier gets. Legally, agencies have a right to do this, within reason. I think charging a $195 agency fee on a $600 policy is excessive. I think charging the fee again to reshop someone is excessive. It just has never sat right with us.
   When we opened Brockman Premier Insurance, we made the decision not to charge these fees. And I honestly can say our business (and our cash flow) have never looked better. So we don't feel the need to add extra fees to our customers premium.
Again- agencies have the right to charge these fees, but not if they are not telling you exactly what they are for and getting your written permission to charge them. You, the consumer, have every right to ask for this fee disclosure. Please don't throw that right away. You may be paying quite a bit more than you need to!
  If your agent is charging you an agency fee (on top of the carrier's policy fee), call us. We would love to quote you. And we won't charge you an extra fee to take care of you.

  If you have questions or need a quote,                                       please contact Brockman Premier Insurance.                             Local 214-592-0859                                                                     Toll Free: 877-987-8683                                                               Visit us at www.wekeepuinsured.com