Consumer policies are assigned to Insurance Brokers in our system according to the territory the customer resides in. There are two types of territories available. Open and Protected. Each of these are explained in greater detail below.
In an open territory, Insurance brokers compete for clients by bidding on how much they are willing to pay for a closed customer. For instance, if a customer signs up for a policy and their premium is $2,000 a year, the first agent could bid $200 for that assignment. The second agent could bid $160 for it. The agent who bids the most will win that Assignment. As the agent’s budget is exhausted, the agent with the next highest bid will start to win assignments until their budget is exhausted. To purchase assignments in an open territory, a $1,000 deposit is required. When a policy is assigned, our fees come out of your deposit account.
In a protected territory, an Insurance broker pays a flat fee for each Assignment generated in their territory. They aren’t required to compete with other brokers for customers. All policies written in their territory are their customers. Protected territories remain in effect for life unless sold to another broker or the deposit account falls below $400 for more than (5) business days. Protected territories require a $2,000 deposit.
HOW DEPOSIT ACCOUNTS WORK
Deposits help assure us that when a customer policy is assigned to an Insurance Broker, the fee for that assignment will be paid to us right away. As your deposit account balance falls below $400, a credit/debit card or ACH transfer payment will automatically be charged to bring your deposit balance back up to $2,000. Accounts that fail to maintain a $400 minimum balance will be removed from our marketing program and any protected territories will be resold to another broker if more than (5) business days pass without the account being brought back up to the minimum balances.