How Selling Insurance Became One of the Worst Jobs in California

Brian Harper probably has the least desirable occupation in California. He sells insurance.

Harper’s job used to be to find good policies on home and auto plans for his clients. Now he breaks bad news: Rates are going up, coverage has been cut, and policies have been canceled.

“It’s soul-crushingly tough,” said Harper, who owns an insurance agency in the mountain town of Coarsegold, near Yosemite National Park. “There are no good days.”

Like Harper, many agents are on the sharp end of a national crisis in home and auto insurance. Things are especially bad in California. Insurers have fled the state, pummeled by losses from drought-spurred wildfires and, this month, storm-triggered flooding.

It never used to be this bad. Harper, an 18-year insurance veteran who sells on behalf of Farmers Insurance, said his job offered the satisfaction of helping people. “A family would walk in needing coverage, you’d write them a policy, and they’d walk out happy,” he said.

“Those days just don’t happen anymore,” he added. “You never get to deliver good news—every rate change is an increase, every coverage change is a restriction. My staff and I, we’ve had to build up some scar tissue.”

The problems stretch beyond California and Florida, said Charles Symington, chief executive of the Independent Insurance Agents and Brokers of America. “What makes this difficult market so unique is its severity and its national scope…our agents are seeing it everywhere,” he said.

Double-digit rate increases for home insurance were approved in 25 states last year, with effective increases of more than 20% in Texas, Arizona and Utah, according to S&P Global Market Intelligence.

Agents find themselves trying to explain the increases. “We daily deal with angry and distraught clients,” said Angelyn Treutel Zeringue, president and owner of the Gulf Coast arm of SouthGroup Insurance Services, a Mississippi-based independent agency. “We completely understand their angst, because we are experiencing the very same issues in our own home and business lives.”

Insurers sympathize, but they are forced to raise rates to offset inflation and huge losses from storms and fires, said David Sampson, chief executive of the American Property Casualty Insurance Association. California has been particularly hard-hit, he said.

“Agents and brokers in California are on the front lines of what is an industry crisis out there…we understand the pain that they are going through,” Sampson said. He blamed state regulations that have made it hard for companies to raise rates. There is only so much insurers can do on their own, he added.

A Farmers spokesman said the insurer has taken steps to “tighten underwriting guidelines and reduce risk exposure in certain market segments.”

Part of the agents’ frustration is how long it takes to hunt down suitable policies and clear underwriting hurdles, Harper said. “Things that used to take minutes now take hours. Things that took hours now take days or weeks,” he said.

Harper’s clients generally put the blame on insurers. “The problem is Brian can only do so much,” said Frank Johnson, a firefighter and client. Johnson has battled wildfires for 20 years. “I personally have probably saved insurers millions of dollars,” he said. That favor hasn’t been returned by the industry.

Johnson, a battalion chief, is paying $6,800 annually, more than double his premium six years ago when he bought his home in Bass Lake, a mountain village surrounded by pine trees. He had to get a state plan for wildfire coverage. Johnson is concerned about the impact on the property’s value: “The part no one talks about is the fact you can’t sell your home.”

One particular headache for agents in California is dealing with the state’s insurer of last resort, known as the Fair Plan, which offers wildfire coverage to people unable to get it elsewhere. The number of policyholders using this state-designed safety net increased by more than a fifth last year alone, according to Fair Plan, and more than 40,000 agents and brokers are trying to use the system.

The last-resort insurer has struggled to cope with this surging growth, made worse by serious glitches in a computer upgrade it installed last year, according to agents. Harper said renewal notices have arrived too late for payments or were sent out with the wrong names. His employees have spent hours on hold trying to speak to someone, only to be disconnected.

One quit recently, he said, overwhelmed by client calls: “It just wore on her, call after call. ‘Is my application ready?’ ‘Is my application ready?’”

A Fair Plan spokesman said it had taken action to address challenges during the transition to a new system. The insurer has tripled its number of customer service representatives and doubled its underwriting team, the spokesman said. That has “greatly reduced delays and brought service levels back to a more normal level,” he added.

Harper, a 46-year-old fan of the Tottenham Hotspur soccer team and a father of three who has lived in central California all his life, is a well-known member of the Coarsegold business community. Many members of the town’s real-estate industry, he said, are friends: “They have been very understanding and sympathetic to my insurance colleagues and me.”

Harper said he is still contending with Fair Plan issues, as well as Farmers’ not renewing policies for many of his clients. His agency makes a profit, he said, but that doesn’t compensate for how hard his job is right now.

“I make a good living and want for nothing,” Harper said. “But I would trade some agency revenue for reduced stress, especially for my staff. Things are especially hard on them, and that’s a burden I feel around the clock.”

Agents such as Harper are often entrepreneurs, taking out loans to buy their businesses. They compete with insurance sales made direct to consumers, including online or through call centers. These direct sales account for about a quarter of home and auto policies, measured by premiums, according to the most recent Independent Insurance Agents and Brokers of America data.

Harper feels locked into his business, which he bought for $325,000 a decade ago. “I basically spent my life savings buying this agency from my predecessor, but it would be next to impossible to sell now because of the hard market,” he said.

“I’ve weighed all my options,” he added. “There isn’t an out.”

Write to Jean Eaglesham at [email protected]