Relax
Well-known member
I've been with my Desjardins agent since they were State Farm in the 80's. Happy with them for the most part, but wondering what's the difference between Agent and Direct, and why they offer the two options.
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Desjardins - Agent vs. Direct?
- Thread starter Relax
- Start date
When an agent/broker sells a policy they receive 12.5% of the total as sales commission and up to 2.5% on renewal.
When you buy direct, you deal with a phone agent in a boiler room that makes a LOT less, gets a lot less in commission and nothing on renewals.
The difference is taken by the insurance company as general income, and make MORE money from you.
You can thank the banks.
I always deal with a broker, to TRY to get some value for my 12.5%
When you buy direct, you deal with a phone agent in a boiler room that makes a LOT less, gets a lot less in commission and nothing on renewals.
The difference is taken by the insurance company as general income, and make MORE money from you.
You can thank the banks.
I always deal with a broker, to TRY to get some value for my 12.5%
Relax
Well-known member
I know that's how brokers work, but do you know for a fact that Desjardins agents work this way as well?
Relax
Well-known member
Oh, sorry I misinterpreted your reply. I thought you were trying to say that I'd save 12.5% or 2.5% by going direct, but actually I don't.
Mad Mike
Well-known member
I wouldn’t say a direct rep makes less, they are licences agents or brokers. I trained those ‘boiler room’ folks, they can make a stable $60k and $15k/year annual bonuses are common. Add in a full benefit plan, excellent pension plan, and it’s not a bad gig.
Also know not all brokers are in it for just you. Most have access to the same plans, if they were just in it for you their prices would all be the same.
I left my Desjardins broker (for my bike, all the rest is still with the broker -- disclaimer: my BIL works there)
I proceeded, at the time, to see my premium drop from $900/ year to $3XX/ year.
It has creeped over the last 5ish years to $800/ year -- for no good reason
Time to look around again.
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Oh, & I believe that they bought SF to get their customers and that they will possibly phase out half of the B&M agents. (Not fact, just my thoughts)
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Brokers have access to multiple insurance companies. However, they can get lazy and not shop your business around regularly to get the best costs.
Desjardins does have good rates. I work for Desjardins. Just not in insurance.
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Desjardins does have good rates. I work for Desjardins. Just not in insurance.
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Relax
Well-known member
Agents aren't the same as brokers. Desjardins (previously State Farm) uses agents, who can only sell Desjardins. Same with Allstate, I believe. Brokers have no allegiance and can pick and choose from whoever is out there.
Martin sherab
Active member
I
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Brokers are licensed, insured against liability and can bind a policy
An agent fills out the forms and has to have a broker bind the policy, basically an un-licensed assistant to a broker and are not licensed and have no liability.
An office can have as many agents as they want, but they have to have at least one broker if they want to bind policies and collect the 12.5%.
A boiler room can have 1000 agents, and one broker.
If an agent gets you to sign, he/she has to hand the policy off to a broker to be bound and will split the 12.5% with the broker in a typical insurance office structure.
There are single line brokers (only sell one product from one underwriter) and there are multi-line brokers (that sell from multiple insurance companies and/or multiple insurance products).
A multi line office usually has a broker.
A single line franchise office typically has agents, that hand off to a broker at head office.
A broker must be contracted to the insurer to bind their products.
"Binding" an insurance policy makes it a contract, you sign the contract as first party, and the broker signs the contract for the insurance company.
Insurance companies want to know who is signing contracts for them... and have a contract with that broker.
... after the policy is BOUND it goes to underwriting, and the insurance companies reserve the right to change the price AFTER the policy is bound
For the most part, the price of the policy is the price of the policy, doesn't matter if you buy it from a broker, agent or boiler room, it's the same price set by the underwriter.
The agent/broker relationship dictates who gets paid and how much for selling that policy. There is no difference to what YOU pay.
"Shopping" an auto policy involves the agent/broker inputting a bunch of data in an computer program, that is provided on a subscription basis by RIBO, and the program outputs the rates for the companies the agent/broker is allowed to sell.
The agent/broker had to input that data to get ANY policy
An agent fills out the forms and has to have a broker bind the policy, basically an un-licensed assistant to a broker and are not licensed and have no liability.
An office can have as many agents as they want, but they have to have at least one broker if they want to bind policies and collect the 12.5%.
A boiler room can have 1000 agents, and one broker.
If an agent gets you to sign, he/she has to hand the policy off to a broker to be bound and will split the 12.5% with the broker in a typical insurance office structure.
There are single line brokers (only sell one product from one underwriter) and there are multi-line brokers (that sell from multiple insurance companies and/or multiple insurance products).
A multi line office usually has a broker.
A single line franchise office typically has agents, that hand off to a broker at head office.
A broker must be contracted to the insurer to bind their products.
"Binding" an insurance policy makes it a contract, you sign the contract as first party, and the broker signs the contract for the insurance company.
Insurance companies want to know who is signing contracts for them... and have a contract with that broker.
... after the policy is BOUND it goes to underwriting, and the insurance companies reserve the right to change the price AFTER the policy is bound
For the most part, the price of the policy is the price of the policy, doesn't matter if you buy it from a broker, agent or boiler room, it's the same price set by the underwriter.
The agent/broker relationship dictates who gets paid and how much for selling that policy. There is no difference to what YOU pay.
"Shopping" an auto policy involves the agent/broker inputting a bunch of data in an computer program, that is provided on a subscription basis by RIBO, and the program outputs the rates for the companies the agent/broker is allowed to sell.
The agent/broker had to input that data to get ANY policy
Relax
Well-known member
This may be true outside of Desjadrins, but that's not what I'm asking. Desjardins does not deal with brokers (at least not in the traditional sense that you described). They have a network of agents that only sell Desjardins insurance products, and nothing from any other insurer. I suppose you could call them brokers who are limited to Desjardins products. This is the business they purchased from State Farm, so all State Farm agents siuddenly became Desjardins agents. They also have Desjardins Direct Insurance, which is their original insurance business from before acquiring State Farm. The question I asked was meant for someone who has insight into the two Desjardins models.
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