A letter I received from another agent. This is definately the attitude you come on with in the beginning after going through the hype and training. Listening to the stories they tell you about the great people in the district that are making billions of dollars a week as a Farmers Agent. Once time goes by, the grass does look greener on the other side though..

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I read your stories with interest.  I am also a Farmers career agent.  However, my experience has been completely different.  Are you interested in the other side? 

Response: But of course!

First of all, I am sorry your Farmers agency did not work out, and I have watched as Reserve career agents have come into my district.  Some have not made it as well, but others have done very well for themselves and Farmers. 

Response: I'm not sorry. If it had worked out I would to this day still be hearing about how I have to sell X amount more of life and financial products or else lose my contract. I also watched many other people go through the program as well. Believe it or not, I was the agent that was on top. That won the awards and hit the numbers and decided that the future was not going to be in my favor. I will definitely not deny that "SOME" Farmers Agents have done well. As a matter of fact, that is exactly how the Farmers Agent structure is set up. A handful are going to make it work. Especially those of whom that have a large amount of cash to float the agency along and at least 72 hours a week to commit until it is profitable. The rest will come onboard, write their family and closest friends for life and P&C then wash out and their policies go to Farmers who assign them to agents at a fraction of the commission they deserve while Farmers gets the rest of the renewal and ALL of the life premium.

Small businesses in general do not all make it, and if starting an agency was an easy way to make lots of money, there would be lots more agents and we would all be rich.

Response: No matter what they tell you, being a Farmers Agent is not being a small business owner. You are an independent contractor with limitations on how you can conduct transactions. You have an exclusive contract with one insurance company to write business. You do not own anything. This is an extremely important concept that you need to know. The closest thing the Farmers Agent Program can be compared to is a Franchise. When you open a franchise such as McDonalds. You are going to have restrictions, such as you cant sell Whoppers or Arby Melts out of that specific store. However you may start another store that is an Arby's and sell Arbys. With Farmers, you cant do that. You have one Farmers Store and that is all you can sell anywhere. Also when you purchase a McDonalds Franchise, you can SELL IT, when you want to get out of Farmers, you just quit and hope that they give you your contract value. See UFAA website for details on Farmers not paying Contract Value to agents who quit.

However, one agent in our district just surpassed 1500 policies in less than three years. 

Response: This person got there by plunging massive amounts of time and money. Agents outside of Farmers rate their agencies based on what we call "Written Premium" 1500 policies with farmers is going to be about $1,200,000 in written premium. Over 3 years thats $400,000 average per year. My first 6 months as an independent, I've written $250k in premium. 85% of which is preferred business. The difference? Preferred business is worth more I decide to Sell the book. If your agent decides to leave right now, what does he get? CV which isnt worth much of anything until year 5 of the program. No matter what, this person is stuck for 2 more years whether they like it or not. After that point, they still cant walk away from the agency like I can. I can sell my stuff off or carry it over to anywhere else I'd like to go.

His last three commission checks have been over 20,000/month.

Response: I love it when someone uses Gross Income as the only figure in calculating if a balance sheet is looking good. Unfortunately in the real world we have to subtract operating expenses such as Office Rent, Staff Salaries, Utilities, Ongoing expenses such as Vehicle, Insurance, Series 6/63 licensing fees, et al. If I pulled in 100k a month but spent 110k, am I doing good? Absolutely not.

Another agent-who had a high school education and no sales experience-is about to go through 1000 policies.  Her last check was over $10,000.  So not everyone flames out. 

Response: I more than agree on this point. I never said that some people do not make money as a Farmers Agent. My point is. There are other options and there are better options. Farmers is not the best option. They are not even in the list of top 10 best options available for being an Agent or "Owning an Agency". Regardless of how successful a Farmers Agent is, they will always be at the mercy of what Farmers does and they will never have ownership of anything. The multi-level marketing structure of having so many agents that fail to make the one agent even more successful is all part of the scheme too. The ones at the top of the pyramid are going to make the most.

Personally, I am somewhere in between you and them.  My sales have been a little over yours in Auto/Home, but less in life.  The main difference is that I did not acquire the monthly expenses you did.  I hired a part-time telemarketer at a few hundred bucks a month, and buy leads from Infoseek for $100/month.  I do pay a “desk rental” from my DM, but considering that it comes with fax/telephone/internet, it is cheaper than my own office. (And maybe I have a more generous DM, I don’t pay $500)  Now that my renewals are building up, I am looking to move out, but have money in reserve. 

Response: I wish you would actually tell a little more about how you are doing and not talk so much about the other two people that arent you. I remember a lot of hearing and telling how so and so are doing so well but not so much about how well I'm doing. Really the only success that matters is yours to you and mine to myself. The first seed Farmers plants into your head is the illusion that success is right around the corner. It might be 5 years away but its right around the corner. You can break even in 3 years but thats just 3 years away, a year from now thats only 2 years away! I want to let you and everyone else in on a secret. Farmers is the only agent program find where making money is 3-5 years away. Most other agent programs give you concessions such as a salary or 70% comission (of policy premium) structures so that you are not going down hill from day one. I know this is all hot air comming from me but I will outline some other programs on this site in the very near future.

We also cant talk and compare expenses if you've listed your only hard expense at $100/month for leads. You have a Cel Phone? You change your car to business use like they tell you? Did you sell yourself life insurance? How bout the rest of your family? How about your personal home, car, utility, child care payments. Do those go away while youre not profitable? Money is coming from somewhere else to help you make bills if you are at all. It shouldnt be this way.

If this level of sales stays constant, I will be able to support my family from here on out, and by year five will be making more than I ever have-even with the expense of an office, telemarketer, and licensed Customer Service person.  If your DM made you hire a contact manager and pay over a grand a month for leads, then the problem might have been with your DM, not with Farmers.

Response: As I said, success is always going to be right around the corner. I'm guessing your about 9-10 months into the program? What if success by year 5 Farmers standards were really only 12 months way with another program? And you didnt have to go through the hoops of paying back subsidy loans that really shouldnt have existed in the first place?

As for your critiques of Farmers, we could go back and forth about this point and that, but here are the reasons that I consider Farmers to be a good company:

1. I don’t know about the national rankings, but the response of adjusters/claims associates when my insureds have had claims has been uniformly and consistently professional, prompt, and fair.  I’m sure that eventually someone won’t be happy with the amount of a settlement, but so far, no complaints. To be fair, one time (only one time) it took a few days to get an adjuster to return a phone call, but that’s what I’m for.  I got on the phone with his supervisor, and two hours later the adjuster was at the body shop approving the additional repairs. 

Response: But overall is what really counts. It doesnt make any difference to me if one claims adjuster in Hopkinsville, Kentucky or Soda Can, South Dakota is doing a great job or not because I dont live there and they wont do anything to help my potential clients. In fact when were talking on terms of what this site is about: Whether or not to be a Farmers Agent. We need proven national statistics that can be applied to everyone that is considering being an Agent with Farmers. I will offer the following in response to claims in Phoenix, 8 of 10 claims from my clients were settle favorably. 2 of 10 clients cant stand even hearing the name Farmers anymore. One of my clients had all 4 rims and tires stolen off of his Vette in his driveway. Farmers couldnt even figure out how to get the car towed someplace to have it fixed for 4 days. Now for national claims and customer satisfaction ratings, check out JDPower and Consumer Reports. Also look at the Departments of Insurance in the state you are in. Arizona has twice as many complaints filed against Farmers as the next lower company (State Farm). In fact you can combine Allstate and State Farm total complaints in a year and they are still lower than Farmers. I can go on forever on how Farmers Rates. I'd really like to see nationwide surveys that are valid indicating Farmers is worth a hoot at all.

2. Farmers rates, in my experience, get better as the limits you sell rise.  In other words, at state minimum or other lower liability limits, we are not as competitive, but at higher liability limits, few companies stay with us.  What is a better policy, $25,000/50,000/15,000 liability limits with a $250 collision deductible, or 250,000/500,000/100,000 limits with a $750 deductible for the same price?  If your answer is the first policy, then Farmers is not the place for you.  (pause)

Response: I'm not sure if you read the other stuff on this site but I fully understand Farmers approach to selling and making their policy so that you cant directly compare it to something someone already has. You also forget that I sold Farmers for 2 years so I more than know what I need to make my client believe in order to buy a Farmers Policy.

The biggest loophole in this theory is when you come upon $500 deductibles. There are many many finance companies that will not accept anything over $500 for comp and collision deductibles. I honestly dont see any reason why if someone wanted a $500 deduct, that they just cant have it at a reasonable price. Farmers is not competitive at this deductible range. Now that I have flexibility to write whatever deducts I wish, I simply explain to people how they work and how they might be able to save some money on it and offer them all the deductibles available. I also write the liability limits based on what I think the client needs and it has nothing to do with cost.

(unpause) But if you get into a serious accident with me, those higher limits will take care of me, after which Farmers (or any other insurance company) will turn around and subrogate those damages, and you will lose your home, bank balance, and half your income for the next decade.  So am I doing my customers a service or disservice by nudging their deductible up a couple dollars but doubling or more their limits.  Like I tell them-you pick up a few hundred dollars of risk on the bottom end, and Farmers will pick up a few hundred thousand of risk on the top end.  They will pay more for a fender-bender that is their fault, but won’t be left financially devastated in the case of a major injury accident.

Response: I'm sure those exact words poured from my mouth 2 years ago. You've exaggerated a couple things though. Please show me a law where someone can lose the only home they have due to underinsurance from an auto accident. You can lose an investment property but not a primary home. Please also show me a state that will allow garnishment of wages of 50% for 10 years! The thing I learned is that we as Insurance Agents shouldnt upsell coverages to people that dont need it. If its so cheap that it makes no difference monetarily then throw it in. Theres no reason to put full coverage on a 1998 KIA and theres no reaon to insure someone with no assets and makes $20k a year for 250/500/100.

Have you ever taken a look to see what the "Average Auto Insurance Claim" is? The NAIC says for the last 3 years its in the range of $850. So if you take that number you can get an effective range of about $500 to $3000 as an average accident or claim someone might have. A little something about that $1250 deductible you sold to the client that really wasnt listening, because this happened to me and I had to make 2 days worth of statements to claims (even though I also had signed policy change and memorandums stating 1250 deductibles) because he said his deduct should have been $500. You can talk till you're blue in the face and people wont remember 90% of what you said about saving money on this and that and how they even ended up with that high deductible. When their car gets smaked by a hit and run in a parking lot for $1300 bucks and they find their deductible is $1250 they are not going to be happy with you and it makes no difference what they signed or what you might have told them 24 months ago.

One last thought on this epistle-which I don’t even know if you will put on your site, but what the heck.  I have compared other companies startup/subsidy plans, and Farmers has good points and bad.  Many companies require that you start up from the word go with a large office and full-time staff.  Farmers does not. 

Response: Excellent, send them to me and I'll post them. I need to know the entire program though, not just the point that you have to start a full office with staff, cause you probably left out that they give you a book with 1000 clients. (State Farm)

Most companies have hard quotas and if you falter-goodbye.  Farmers does not. 

Response: Have you even read your contract? They change them each year but mine gave the following hard quotas or my contract is (and in fact was) cancelled:

• 30 P&C and 3 Life minimum per 3 months (since increased to 40/4)
• I must get 6 and 63 licenses or get booted from program
• End of year 2 of career program 435 odd policies written to date
• Waive of subsidy (lots more policies written)

The big deal here is the 3 life per quarter which when I left new agents had to do 4 per quarter its possible that they will inch this up all the time. Farmers Life product is crap and I have problems lying to people whom I care about so I could no longer sell it .

I have not found a single company that does not have some kind of repayment plan for their subsidy, and most (not all) do not have any forgiveness clause.  Farmers does. 

Response: I havent found any companies that offer subsidy. The ones I've seen they just go ahead and give you the money or pay you a salary.

Of  course, not every company operates in every state, so I cannot claim to be aware of every plan, but I have compared the plans of the top five companies operating in my particular state.  If Farmers does have a flaw, it is that a marginal performer can hang on for years, not hire staff, and make a middle-class income.  We just aren’t very good at weeding out slugs.  I hope that I don’t turn out to be one, but so far it looks like I won’t.  Now the ball is in your court.  It is your website, but if you are interested in balance rather than just your bad experience, I’d like to see it.

Currently satisfied Farmers Agent

Response: Do you really think that Farmers and yourself can be mentioned as "We"? They certainly have done everything they can to make sure they are not directly associated with the agents by making them independent contractors paid by 1099 with no benefits. They can also pay you below minimum wage because you are not a part of Farmers.

Honestly, I have no problem posting these types of letters on this site at all. I was in your exact same shoes 2 years ago when I was only a few months into the program. I believed all the same things you do and I said many of the same words that you say to other people. I also looked at sites like this one and didnt believe it until bad things started happening to me. This site is here to educate on all aspects of being a Farmers Agent. The hype and drivel available from Farmers is already provided to potential candidates, the truth about how things really work is not, and thats what I focus on here. Thats why this site is going to appear negative towards a person such as yourself.

It doesnt matter if I am completely wrong on every point I present to you folks. One very important one with remain that I would love to have somebody refute. If someone could prove me wrong on this point or convince me that i'm wrong on this point, I will turn this site into a "everybody be a Farmers agent cause its so great" web site. and here it is:

Where is the Agency Ownership, what do you really own? Contract Value is not competitive when compared dollar for dollar against ownership of a book of clients. How is it possible that being a Farmers Agent with no ownership is better than having the option of selling off your agency if you were independent?

-Agent 1: farmers-online.com