The single most useful thing on this website
How premiums are actually set
Every agency in Queens will tell you they can save you money. Here is the mechanism that decides whether that is true, why it usually is not, and what genuinely does move your premium.
The premium is the carrier’s, not ours. The premium is the carrier's, not ours. A property and casualty insurer files its rates with the New York Department of Financial Services, and the producer's commission is already inside the filed rate. A producer who gives up commission to bring your premium down is making a rebate, which New York Insurance Law 2324(a) prohibits. So the same policy, from the same carrier, on the same date, costs the same through this agency as through any other. Anybody telling you they will beat that number is describing a different policy, a different carrier, or nothing at all.
A property and casualty insurer in New York cannot charge whatever it likes. It files its rates and its rating rules with the Department of Financial Services, and the premium for a given risk is produced by applying those filed rules to the facts about you. That is the filed rate.
The producer's commission is already inside it. It is one of the expense components the rate was built to carry, in the same way as claims costs and the insurer's own overheads. Nobody adds it on top at the end.
What follows from that, said plainly
The same policy, from the same carrier, with the same limits and deductibles, on the same date, for the same person, costs the same amount whoever sells it to you. Through this agency, through the agency four blocks away, through a call centre, or direct.
A producer who wanted to undercut that would have to give back part of their commission, and that is specifically prohibited. New York Insurance Law 2324(a) forbids a producer from offering a rebate from the premium or any inducement not specified in the policy, and the Department has said in terms that reducing commission to lower an insured's premium is exactly that. It is not a grey area and it is not a matter of company policy — it is the statute.
So the industry's most common promise — that we will beat your rate — is one of three things. It is about a different carrier, which is legitimate and is most of what an independent agency actually does. It is about thinner cover presented as though it were the same, which is the version to watch for. Or it means nothing at all.
What genuinely does change your number
A different carrier. Appetites differ enormously: the company that prices a two-family owner-occupied house well may be poor at a young driver, and vice versa. Finding the carrier whose filed rules happen to like your particular facts is real work and it is worth real money. It is also the entire justification for using an independent agency rather than one company's own salesperson.
Different limits and deductibles. Raising a deductible from $500 to $1,000 reduces a premium meaningfully; so does dropping collision on a car worth less than the cover. Those are genuine savings and they are also genuine reductions in protection, so they should be decisions rather than surprises.
Credits you qualify for and are not getting. This is where we most often find money: a good student certificate that lapsed, a defensive driving course nobody applied, a multi-policy credit that stopped when one policy moved, a protective-device credit for an alarm installed three years ago.
Corrections. A rebuilding cost carried forward from a smaller version of the house. A vehicle listed at the wrong garaging address. A business on the wrong class code. Wrong facts produce a wrong premium in both directions, and fixing them is not negotiation, it is accuracy.
Why this page exists at all
Because telling you this loses us the easiest sales pitch in the business, and keeping it costs us nothing we should have had. If you understand the mechanism, you can hear the difference between an agency that has found you a better carrier and one that is quoting you less cover for less money — and that distinction is worth more to you over ten years than any single premium.
It also sets up the only sensible way to compare two quotes: like against like. Same carrier tier, same limits, same deductibles, same endorsements. If the two proposals in front of you differ in any of those, you are not looking at a price comparison at all.
In order
How this works in practice
The carrier files its rates
With the New York Department of Financial Services, including the rating rules and the expense components. Commission is one of those components.
The rules are applied to your facts
Garaging address, drivers, construction, class code, limits, deductibles, history. The output is a premium, not an opinion.
The producer cannot alter it
Handing back commission to lower your premium is a rebate under Insurance Law 2324(a). So the number is the number, whoever sells it.
Which leaves three real levers
A different carrier, different limits and deductibles, and credits or corrections you are owed. We work all three and we say which one moved.
Questions we are actually asked
How premiums are actually set — frequently asked
Can you get me a cheaper rate than my current agent?
Only by placing you with a different carrier, changing your limits or deductibles, or finding a credit or a factual error. Not for the identical policy from the identical carrier — that premium is a filed rate and it is the same through anybody in New York.
Why do quotes from different agencies differ then?
Because they are usually quoting different carriers, and sometimes different limits or deductibles. Two proposals for the same carrier and the same cover should be within pennies of each other. If they are not, look at the limits before you look at the price.
Is it illegal for an agent to discount my premium?
It is prohibited for a producer to rebate part of the premium or to give an inducement not specified in the policy, under New York Insurance Law 2324. The Department has said explicitly that cutting commission to reduce an insured's premium falls within that. So an agent offering it is either confused or offering something else.
Then what am I paying an agency for?
Finding the carrier whose filed rules fit your facts, getting the limits right, catching the credits and correcting the errors — and then the years afterwards: renewals read before you get them, certificates, endorsements and claims. You are not paying us separately for any of it; the commission is inside the premium either way, which is the argument for using it.
Read next
Related reading
Bring the declarations page and we will read it with you
Ask us what it would cost
Send or bring the summary pages of what you already have — those two sheets are where most of the useful conversation is. We will tell you what we would place it with and what that would cost, what we are paid for doing it, and whether you should move at all. Quite often the answer is that your current policy is priced fairly and you should keep it, and that is an answer we give in writing like any other.