• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer
Law Offices of Jonathan G. Stein Logo
(916) 247-6868
  • Home
  • About Me
    • Organizations, Publications and Presentations
  • About You
  • Practice Areas
    • Debt Collection
    • Estate Planning
    • Personal Injury
    • Landlord Tenant
  • Client Testimonials
  • Resources
    • Blog
    • Brochures
    • Helpful Links
  • Contact

How does your insurance agent get paid?

October 23, 2005 by Jonathan Stein

I have been asked in the past how the insurance agent gets paid. The easy answer: commission. Most insurance agents, whether they work for a captive company like State Farm or an independent agency or a broker, get paid a percentage of the premium that they write.

Here is the catch: they get more for first year premiums than they do for subsequent premiums. The amount of the commission varies, but it is usually at or near 50% for the first year. It then goes down for subsequent years.

In other words, suppose your agent is Bill Jones of the Jones Insurance Agency. Bill might write your policy with ABC Insurance Company. Of your $1,000 per year premium, $500 goes to Bill. In year 2, when your policy renews, Bill may only get 20%, or $200. But, if Bill writes your second year policy with XYZ Insurance Company, Bill may now get another $500 since its a new policy. This helps to explain why some people seem to have a different insurance company every year.

Now, I a not saying that every insurance agent does this. Not even most do it. But, when your agent wants to switch carriers for you, this is one thing to ask about.

Categories: Insurance Operations

Primary Sidebar

Sign Up For Our Newsletter Below

Lists*

Practice Areas

  • Debt Collection
  • Estate Planning
  • Personal Injury
  • Landlord Tenant

Allow Me to Help You

    Footer

    Contact Us

      Practice Areas

      • Debt Collection
      • Estate Planning
      • Personal Injury
      • Landlord Tenant
      The information contained in this website is provided for informational purposes only, and should not be construed as legal advice on any matter. The transmission and receipt of information contained on this Web site, in whole or in part, or communication with The Law Offices of Jonathan Stein via the Internet or e-mail through this website does not constitute or create a lawyer-client relationship between this firm and any recipient. You should not send any confidential information in response to this webpage. Such responses will not create a lawyer-client relationship, and whatever you disclose will not be privileged or confidential unless this firm has agreed to act as your legal counsel and you have executed a written engagement agreement with The Law Offices of Jonathan Stein. The Law Offices of Jonathan Stein © 2025. All rights reserved. | Sitemap | Privacy Policy | Disclaimer