This is an open letter to all Farmers Insurance Agents from the widow of a recently deceased Farmers Insurance Agent.
My husband became a Farmers Agent 35 years ago in 1980. He was one of the top producing agents for his Regional
Office for the next 17 years with a stellar record of making all the achievement clubs every single year including Life and
Commercial Masters, Life and Commercial Round Table, Toppers club and Championship. He was even chosen as a
Presidents Council member twice.
In the late 1990s he was diagnosed with stage IV cancer of the colon and liver with a chance of survival that was less
than 15%. After undergoing semi-experimental, aggressive and extensive surgeries, a year of topical and systemic
chemotherapy and 5 weeks of grueling radiation, he managed to become cancer free and continue living, albeit with
somewhat impaired health and with less energy than before. He also had to learn to live with some of the side effects
of aggressive treatments stemming from impaired liver functions. The disease was an eye opener in many ways. The
first thing my husband realized was that the life insurance policies that he so good at selling did not really contribute to
agency building. One needed property and casualty policies for continued for renewal revenue. Being in the Los Angeles
metropolitan area he also knew that auto and home policies would come and go as Farmers Insurance did not really
provide a competitively priced product. He always liked the commercial side of insurance so he started building on that
side of the business. Of course as most agents know, the Farmers appetite in this area is very limiting, and therefore a
substantial amount of business had to be placed outside of the Farmers Group of companies.
Any agent who has been with Farmers long enough knows the carrot and stick approach the company uses to keep their
agents productive. Although my husband’s contract was the original 1980’s version with no requirement for production,
and freedom to place business outside if it does not fit the Farmers appetite, the insurance company started putting the
pressure on for my husband to be more productive. They had no consideration for the fact that my husband no longer
had the ability to work the 16 hours days he used to put in before he became sick. They threatened him with a multitude
of consequences, once with taking away the 500 and 700 accounts he had been given to service as other agents had
left or been terminated. Other times management walked in and randomly audited files for “misplaced” business (lucky
for us we extensively documented each file for declinations before placing it outside of Farmers). Another time a District
Agency Manager came into our office and very rudely tried to make my husband “retire” or resign, with no evidence
of any wrongdoing on my husband’s side. My husband, always the gentleman, allowed this representative of Farmers
Insurance rant and rave, with his district manager right there and unable to say anything. Eventually I interrupted the tirade
and pointed out to this man all that my husband had been through and all the side effects he lived with. That ended this
meeting, obviously with the realization that if any unreasonable steps were taken by Farmers, my husband would have an
airtight reason to sue for wrongful termination.
In February of this year my husband passed away after a rapid deterioration in health and multiple organ failure.
Throughout his somewhat lengthy hospitalization our son and I maintained his office, kept full office hours, and provided
full service to our Farmers Insurance policyholders. I had always been a part of my husband’s office, managing the office
and providing service support to his clients. I am fully licensed so everything was done properly and professionally. My
son is also a licensed producer and therefore we had a fully licensed staff in place even though the agent was unable to
be in the office. After my husband’s passing we tried to maintain reasonable office hours in order to service the clients.
The District Manager was full of sympathy and attended the funeral. The regional management wrote a glowing letter of
support and condolences and donated generously to the school my husband had always supported.
However, at the same time while I was in deep shock and full of grief, the District Manager started asking me what my
intentions were as far as the Farmers book of business was concerned. He advised me anything I worked on from the
date of his death we would not be paid for. About ten days after his passing, I came into the office, turned on the agency
Dashboard and found I had no access. Still clueless, I called the helpdesk and was informed there was no such agent
in their system! I still had the Farmers files but I was unable to provide service to anyone. With no warning of any sort,
the management at Farmers had disconnected my husband’s agency. I still had not advised them as to what my family’s
intentions were. For all they knew, one of my sons or I could have wanted to continue on as a Farmers Agent.
However, my sons and I already knew the true nature of what it meant to be a Farmers agent. We knew there was more
stick than carrot in the way agents were treated. The 35 years my husband had been their agent had taught us both sides
of the Face of Farmers.
Soon after this, I received a letter from Farmers Insurance advising me that although I had promptly and diligently turned
in all of the files connected to my husband’s book of business to the District Manager, and also given them our dedicated
Farmers Insurance telephone number, I would not be paid the contract value for the next 90 days. My understanding is
that although I will not be paid for any policies I put in force after the day my husband died, they would have the right to
not pay me for any policies that lapsed or cancelled for the next 3 months. So as far as they are concerned my husband’s
contract stopped on the day he died, but the value of the agency could still decrease even though he was no longer an
agent. I wish someone could tell me how this can be legal! Even the district manager does not really know. He told me I
would probably be paid in 30 days. It has now been 45 days and I have not seen any checks from Farmers.
Therefore when an agent dies, his family is left high and dry with no income to even pay their bills if they rely solely on the
agent’s income from Farmers. Chances are a young agent’s family would be left in very dire straits if such an event were
to befall him. The intent of this letter is one of a cautionary tale. Who is going to pay your family’s or office bills if something
were to happen to you today? The new contract you might have signed really reins in your ability to have any form of
income outside of the Farmers agency. The Farmers Insurance Agents group life policy will not pay your family for at least
another 45 days and neither will the FNWL life insurance policy you might have purchased on yourself.
I am not an attorney, but I learned the hard way that when a sole proprietor dies his business dies with him. I am guessing
most Farmers agents might well be sole proprietors. Even as a corporation, the agent is always an individual. Agents need
to make sure they understand the ramifications of this in case something does happen to them. We sell life insurance to
protect families, and yet we do not really understand what can happen to our own families if suddenly we are no longer
Mrs Vartan Karlubian
Source: UFAA The Voice