Brokers charging broker fees??? | GTAMotorcycle.com

Brokers charging broker fees???

oioioi

oioioi

Well-known member
Site Supporter
Forum Sponsor
Is it normal (or legal) for a broker to be charging a non-refundable broker fee?

Back in October I was given a quote for a Echelon Policy through a broker.
In the email that he sent the quote with, he mentions a
"(note: a non-refundable broker fee of $100 is due before the application is sent out)"

I did not think think that they are able to charge a broker fee. Shouldn't this be something that is covered through the policy already.
I know they are providing you a service, but this is the business they are in and should be getting this service fee covered by the insurance company.
Probably a % of the total amount of policies they sign or something like that.

Would this explain why his quote was the cheapest thus far?
Any other broker I spoke with did not mention anything about a broker fee and I don't recall anything like this when I was calling around for my car insurance.
 
Dalton Timmis tacked this on my commercial policy a year or two ago. I'm with you, sketchy as. I highly doubt that the broker fee is their entire compensation. Either charge me straight up for your fee, or hide it in the rate. Doing both does not make me happy.
 
sounds sketchy
I would guess it's to cutdown on the workload generated from quote shopping

Ready Honda tried this with me back in my early 20's
wanted a $500 authorization on my card to give me a quote on a Civic

needless to say I've never owned a Honda anything
 
J_F said:
sounds sketchy
I would guess it's to cutdown on the workload generated from quote shopping
Click to expand...
I understand that idea, but DT is charging me the fee yearly and I am not jumping around between brokers. This seems to be related to either a lower kickback level or increased profit needed at the broker level.
 
GreyGhost said:
I understand that idea, but DT is charging me the fee yearly and I am not jumping around between brokers. This seems to be related to either a lower kickback level or increased profit needed at the broker level.
Click to expand...


That's even worse.
I would maybe understand it more for a first time buyer of their service.
But if you renew year after year there really isn't much work on their part.
The renewal paper probably doesn't even cross their desk as they come directly from the Insurance company.

Right now, TD seems to be winning the race with best rate. (I wouldn't think they have any broker fees as they are direct)

Called today and was quoted as low as $799 for full coverage with 1Mil Liability and only $500 deductible . 08 FZ6, 36 yr old with Group Discount (Ryerson Alumni)
If I bring down the deductible to $300, the premium goes up to ~$805. No brainier for a $194 savings (in case of filing a claim) with only $6 more of a premium annually.


The other broker would be cheaper if he didn't want the non-refundable fee.
 
Charging for a quote, as long as they're up front about it, is legal.
Kinda dooshy, but legal. I am sure that you could find another broker selling the same companies that doesn't charge an up front fee.
I would hope that IF you did buy the policy, they would refund that charge... if not you just paid a $100 more than the insurance company is charging for the policy... I BET YOU DOLLARS TO DONUTS SAID INSURANCE COMPANY WOULD LIKE TO KNOW.

When you buy a NEW policy, the broker that sold the policy is paid 12.5 % of the policy total.
At renewal time the company sends you a notice, you pay the bill and the insurance company cuts the selling broker a check for 2-4% of the policy total.
Except in the case of a "Facility" policy. Facility policies pay a fixed rate.
 
bitzz said:
I BET YOU DOLLARS TO DONUTS SAID INSURANCE COMPANY WOULD LIKE TO KNOW
Click to expand...

I considered calling Echelon to ask about this. But didn't have time.
Preferred to call another company for a quote.

That's a nice percentage to work with.
 
I can't help but wonder what the reaction would be if someone came into the dealership looking for a quote on a car and we charged them for that. Or if you called Rogers or Bell looking for quote on a phone plan and they asked for your credit card up front.

It's gouging, plain and simple.
 
The funny thing is that in this case a good chuck of the leg work has been done already.
He has already taken my info and bike info and provided me a quote.
I would just need to say "yes lets go with it" and finish off the formalities.

I will reach out for a newly updated quote and question the $100.
I will post an update
 
Insurance brokers in Ontario are regulated and they can charge broker fees. Most don't.

Under the insurance brokers act 7.1, and RIBO a broker cannot charge a fee that has not been disclosed to you. Furthermore, if they do charge a brokers fee, they are obliged to disclose to you the total quote, their commission, and any broker fee. Failure to disclose fees is a pretty serious deal for a broker, if they didn't properly disclose their fee and commission (if they charged a fee), ask for the fees back.

Disclosure looks something like this:

Premium Quoted $2000.00

Commission $400.00
Broker fee $100.00
=================================
Total Broker Remuneration $500.00
 
Mad Mike said:
Insurance brokers in Ontario are regulated and they can charge broker fees. Most don't.

Under the insurance brokers act 7.1, and RIBO a broker cannot charge a fee that has not been disclosed to you. Furthermore, if they do charge a brokers fee, they are obliged to disclose to you the total quote, their commission, and any broker fee. Failure to disclose fees is a pretty serious deal for a broker, if they didn't properly disclose their fee and commission (if they charged a fee), ask for the fees back.

Disclosure looks something like this:

Premium Quoted $2000.00

Commission $400.00
Broker fee $100.00
=================================
Total Broker Remuneration $500.00
Click to expand...
That makes sense, and I can understand charging a fee if the policy goes through to cover admin costs and whatnot but op mentioned that it was a fee just to submit the application. If it didn't go through for whatever reason they still grabbed 100 from you.
Forum Sponsor
 
You must log in or register to reply here.

Back
Top Bottom