Understand the Fees & Commissions Going to Your Insurance Broker
With our insurance commission calculator, you can better understand how the fees and commissions you pay your insurance broker compare to similar companies.
Insurance brokerage compensation can be made up of fees, commissions, and bonuses from insurance companies. Make sure you know how much you are being charged and that your incentives align.
You may hear a broker say, “It doesn’t matter to me, I make the same no matter who you choose.” That is not accurate. Brokers are most often paid “supplemental compensation” by carriers and annual incentives.
Make sure all compensation is disclosed to you.
How to Calculate Insurance Broker "Total Commission"
Payments are made in two forms, both commissions and supplemental compensation. Add those two numbers together and dividing by total premiums will yield the "total commission" percent.
Do Broker Commissions Vary By State?
Depending on the state, if you have less than 50 or 100 employees, the commissions may be fixed, but the total comp to the broker or consultant is not. Your broker is paid both a commission as well as supplemental bonuses from insurance carriers. Supplemental bonuses include year end kickers and other incentives from carriers paid to brokers based on the number of employers they bring to the carrier, new employers, retained employers and other metrics. Make sure you know and ask your broker how they are being compensated.