Farmers Billing: You Are The Weakest Link.. Goodbye!
As a Farmers Agent, the number 1 complaint that I could have about the company is its horribly crippled billing system. Heres an example of what a Farmers Agent will have to deal with from when writing a new business insurance policy with Farmers.
Agent quotes the policy. In this case we'll say its an auto insurance policy but home would have the exact same result unless you use the Full Payment Method. We'll make this really easy and say the policy is $600 for six months. Every other insurance company that Ive dealt with since leaving Farmers, theres a down payment between 1/6th and 25% depending on payment type for a 6 month policy or 1/12 and 25% for a 12 month policy if you want to use a monthly type payment plan. Heres an example of how Insurance payments work with other companies and how they work with Farmers.
Other Companies:
Down Payment = $600 total 6 month premium * .20 - $120 down
Monthly Payment = ($600 - 120) / 5 = $96/month |
Farmers Insurance Billing :
Down Payment =( ($600 / 6) * 1.5) + $15 (policy fee) = $165 down
First payment billed to client = ??? hmm what do we do?
The problem we reach here is Farmers, depending on what day of the month you submit it on or how many days before, on or after the effective date of the policy the first payment will be billed anywhere between 45 and 60 days in advance.
So the first payment due to the client can be in the range of:
(600 - 150) / 5 x 1.5 = $135
or
(600 - 150) / 5 x 2 = $180
Farmers Agent: "So Mr. Client, your downpayment today is $120"
Client: "Ok whats my monthly payment?"
Farmers Agent: " well, your first payment will be between $135-180"
Client: "Umm, which is it going to be?"
Farmers Agent: "Somewhere in that range"
(silence)
Client: "Uhh ok I guess"
Remaining Monthly Payments:
Logically you would think that it would be something like -
Total Premium - Down Payment - First Payment / 4 = monthly payments
But NOOOOOO - Farmers Agents out there please fill this in! Whats the monthly payment going to be?
Nobody has a stinkin clue!
|
You have to call Prematic on a daily basis to get the same thing explained to you in a different and equally confusing way each and every time. You have nothing to tell the client but "Well maybe it will be better next month".
As a Agent with Farmers I spent 20% of my day dealing with billing issues.
I lost 1 in 6 clients within the first 3 months of signing them because of a billing issue.
I lost an additional 1 in 10 at renewal due to billing confusion.
Why is Farmers Insurance, Prematic, Easypay so difficult to deal with? The example illustrated for "other insurance companies" isnt far from the truth. Billing isnt that complicated. It is as simple as Gross Premium - Down payment = Monthly premium total / number of payments
There might be installment fees per month charged. Some companies charge this and some dont. Farmers does for sure because they've been sued for it in California. But the other insurance companies dont create a huge black box to calculate a billing method for their clients. They use a simple mathmatic formula.
Why is it so difficult to be able to estimate monthly insurance payments? Mortgage companies can do it for loans, your car loan payment is the same every month. You can even divide your credit card balance by a percentage and figure out what the payment is. Why does Farmers have to make it so complicated? |
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