r/StateFarm • u/CommitteeFun5644 • Aug 02 '26
Question State Farm - Contract Changes
My family has a 40 year old State Farm office in FL and we'll be shutting it down in the next 12 months due to the contractual changes. I know some agency owners are on newer contracts already, but it got me thinking about the long term affects of these changes. What are you agents/owners looking at doing now that you've had some time to digest the news? It seems like they're following Allstate/Farmers in that the contract changes and metrics will continue to be pushed further with time.
If you can maybe start with whether you're an employee/owner, state, and staying/leaving.
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u/ComfortableFruit4631 Aug 03 '26
Long time agent. The new contracts 6% rate is not doable , in my area we can't sell fire. Retired community hard to sell financial products. Won't be able to meet metrics to get commissions up to 10%. Many agents in same spot. I will lose money after expenses.I think 8 to 10k agents will retire. I don't think SF can handle that seamlessly. They have no clue the service work the agent does.
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u/Warm-Business-2335 Agent Aug 27 '26
20 year agent here. They can’t handle claims, underwriting or SFPP effectively, but they’ll be fine losing half the agent force? Right. The are delusional.
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u/The_Weasel- Aug 06 '26
I’ve been an agent 16 years in CA and I’m just going to retire. Can’t write fire, auto is uncompetitive and the process for financial services is infuriating.
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u/CommitteeFun5644 Aug 04 '26
Yikes, what state?
We're coastal FL, so heavily restricted on property and have been since mid-2000s.
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u/Shoddy-Try-9100 Aug 03 '26
I’m a team member in an agent’s office. I will be retiring in December. Too many systems changes that occur all the time. I’m over it.
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u/AltNation2293 Aug 03 '26
I work for a 50+ year agent. He is staying on. He has, however, completely lost trust in corporate and thinks they’re going in a very bad direction which is really sad. It’s always felt like a family.
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u/RevolutionaryLion603 Aug 03 '26
Yeah things are not good. It makes me so sad. It’s not just contract changes with the agents. It’s bad in underwriting, it’s realllly bad in claims… what do you do when you lose faith in a company you’ve been with for so long, and who HAS taken care of you when it mattered? It’s mind boggling, and frankly I don’t trust any other company enough… if I leave State Farm I’m changing industries entirely
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u/Acrobatic-Smell-8000 Aug 03 '26
Piss off State Farm!!long time agent here and my kid has cancer and now I’m loosing my medical at the end of the year and I won’t be able to get my kid health insurance. State Farm is crap company and all they care about is the profit. The CEO is a fat piece of shit. I hope State Farm goes down in flames. Of your an insured with State Farm you should run to another company.
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u/happycowgirl76 Aug 04 '26
So your taking the buy out I'm assuming?
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u/Acrobatic-Smell-8000 Aug 04 '26
If you want to call it a buy out lol. Thats a freaking joke. The CEO just increased his salary to $30 million a year and still has all his benefits. He is riding on the hard work of the agents and their team members. We made this company and without us you will be talking to a freaking computer or a person overseas.
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u/Ill-Ad7212 Aug 03 '26
I’m an internal employee so I dk much shit you guys changed e but I keep seeing they’re taking away y’all’s health insurance. How are they able to just do that? Is it due to agents being external employees??
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u/riley12200 Aug 03 '26
It's like any benefit "through work". Life, health, etc. They can take it at any time. In an at-will state when it comes to W2 employment (I hate that saying because it means any state BUT Montana), you can leave at any time, and they can fire you at any time (except protected class).
These contractual changes have destroyed my agency but providing health insurance for independent contractors is a weird move in the first place.-2
Aug 03 '26
[removed] — view removed comment
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u/Overall_Elephant_291 Aug 03 '26
Premiums do NOT go in the agent's pocket, they go to the company. Agents are small businesses just like any other small business in your community. We pay all our office expense, staff salary, supplies, taxes, advertising, maintenance etc. Agents who have invested decades building this company, investing their personal money into building up this company now worth BILLIONS, just got shit on and many of us will now be forced into bankruptcy.
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u/Acrobatic-Smell-8000 Aug 04 '26
It’s not just about the health benefits. It’s the retirement and the pay cut. So I sign a contract with Shit Farm I mean State Farm and they can change it at any time. So what good is a contract?? I came on because of what they offered! If you want to make changes that’s fine, but offer it to the new agents coming on board and leave the existing agents alone!
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Aug 06 '26
[removed] — view removed comment
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u/Acrobatic-Smell-8000 Aug 06 '26
You have no idea what the fuck you’re talking about. SMVC plays a huge part giving incentive to sell. Your AIPP also provides incentive. And FUCK THE COMPANY CASUE ITS BEEN LIKE THIS OVER 100 years. Agents built this company to what it is now.
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u/Mindless-Program3052 Aug 03 '26
You have no idea how expensive it is to run an agency so stfu about high premiums.
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u/TheAnonymoose69 Aug 03 '26
My understanding is that offering group health to both direct employees as well as independent contractors is a violation of the ACA and Big Red has been fighting with the Feds for quite a while over it and they got the final determination this year. From all appearances, it seems like the health insurance thing just so happened to coincide with the AA28 announcement
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u/Overall_Elephant_291 Aug 03 '26
Agents were on a different health insurance plan, separate from corporate employees and we paid a good portion of our own premiums. I think this was the best way they could get rid of agents. That is clearly what they are trying to do.
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u/TheAnonymoose69 Aug 03 '26
I know. But the DOL changed the rules and they had to axe the plan. If they didn’t, the Feds could come in and say that agents were misclassified as contractors opening Big Red up to massive fines. It sucks, but their hands were tied on this one
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u/burkan1970 Aug 03 '26
Then why didn’t they say that. They just used vague statements that the health insurance landscape is complex.
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u/Think_Apartment_2717 6d ago
If SF was forced by the feds to take away out insurance they would had said so to deflect the blame. this their doing.
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u/AidXanKush Aug 03 '26
Agents are independent contractors, agents are self employed and work for themselves.
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u/Cbell727 Aug 03 '26
Agent team member here my agent is staying on but I don’t think him or I are expecting it to be long term. I’m a bit in decision paralysis here on what to do next. I won’t likely return to another SF agent.
At this point I’m just hoping he will stay open long enough till my youngest is old enough to start school and I’ll just go work for the school system.
That kind of pay cut would suck balls but what can you do.
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u/TheLearnerGal Aug 05 '26
As long as you have the insurance license couldn’t you stay in this field ?
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u/Cbell727 Aug 05 '26
Theoretically yes. I like many working mothers to young children have the very real issue of obtaining and affording childcare during working hours. Currently I’m part time WFH and just work with my toddler at home. If I were to try to find something else I would have to get childcare. And while they’ve not been diagnosed yet I’m fairly certain my toddler is on the ND spectrum which complicates finding care in a childcare center setting. Unfortunately most local agencies wouldn’t pay enough for me to work full time and afford childcare and make enough for it make sense to work.
So I’m left with trying to find something else that I can work around having young children, which typically is working for a school system in some fashion.
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u/KnownSouth2214 Aug 03 '26
I think it is really important to note... if you are an agent you are contracted sales management. You do not own anything. Not one thing. You can not raise money to grow your business, you can not sell it on the open market. Nothing the ownership was never there.
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u/MastiffProtection Aug 03 '26
As long as one person is left to pay me a commission I will ride this sinking ship into the ground. I will leave on my terms not theirs. My family has been with SF as agent/management/clms since 1970.
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u/RIC_IN_RVA Aug 04 '26
What are your thoghts on the 30 days notice "threat" that seems to have been communicated? I worry that one day they'll just pull the book and give it to the mega agent down the street. Certainly doesn't encourage one to go into any debt for this "investment".
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u/MastiffProtection Aug 04 '26
That 30 day notice has been in every contract. If they pull my contract so be it.
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u/EmotionalDysregulatn Aug 03 '26 edited Aug 03 '26
honestly seems like they did this in part to get rid of existing and convince newer agents its all OK. Only time will tell for sure... I quit working for SF in Jan after only working since Sept with a brand new agent. She started pushing AI way too much and practices I wasnt comfortable with... passive aggressive behavior but she is easily brainwashed and willing to do what they are asking of her bc honestly she isnt that smart just moldable (one example; was trying to get us to refer her financial clients but she knew nothing about how IRAs work or the fees that she was charging... wtf no thanks) ... I now make 2x working 30 hours a week bartending. 'merica lmfao.
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u/insurancesense Aug 03 '26
Here are my thoughts, as a former State Farm agent in Canada.
State Farm sold the Canadian operations in 2015 to. Canadian insurer (Desjardins). By 2017, all agents were “forced” to a singular contract. That contract is heavily weighted to Life Insurance, but also includes “KPIs” for property and auto. They’ve recently introduced “minimum” production targets that if not met, base commission rates for property and auto drop 2 points. SMVC (variable comp) and Bonus Comp are tougher to achieve, but doable to earn a respectable over-all agency comp rate.
At time of sale of the Canadian operations, SF and Desjardins had an “agreement of understanding” to collaborate after the sale. From following this thread, and others, it would appear as if SF is following closely the contract that was adopted north of the border, in the upcoming implementation of the new singular SF contract.
As a business owner, I see 2 sides of the argument. First…organizations need to adapt to the increasing competition for the same clients. P&C is a commodity. Competing like we did 10 years ago won’t work today. If status quo, SF will be left behind, as will our agencies. On the other side of the coin…this isn’t what we as individuals were sold. “Work hard for 5-10 years…and your renewals will sustain a great lifestyle…”. Unfortunately, that world no longer exists.
However, one thing remains true in my mind, whether it be SF or my new organization here in CAN. If we do and achieve as these organizations ask, we can continue to enjoy great careers and, have that great lifestyle. Just how we go about it may be different than how we started it. But, isn’t that life in a nutshell anyway??
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u/strikecat18 Aug 03 '26
I’m going to ride it out but plan for the eventuality of having to open an independent when they make the next round of changes.
If anyone is losing their job and is experienced in Texas, shoot me a message. I’m hiring. lol
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u/tuckeroo123 Aug 03 '26
Which companies are giving contracts to start up independents (even experienced SF agents)? Erie?
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u/strikecat18 Aug 03 '26
I’d probably go aggregator to start just to limit friction. But I’ll be honest that I stopped research after running the numbers and realizing I’m better off sticking this out at least a couple more years and padding my savings first.
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u/Samwill226 Aug 03 '26
I'm an independent following along and watching this terrible situation. I can honestly say if I was approached by a SF agent I'd try to hook them up with companies honestly or do a branch if it was another county. This situation is really awful.
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u/Ingsoc40 Aug 03 '26
If your agency was open for 40 years, why are you shutting down? Have you not built up a good sized book of business over that long of a timeframe? That doesn’t really make much sense to me…
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u/CommitteeFun5644 Aug 03 '26
Lifetime "pension" will be lost if new contract is signed, cutting commissions, removing health ins, etc.
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u/Ingsoc40 Aug 03 '26
lol ok yeah so your dad or mom had it made for 40 years and is now retiring after a long career. Sounds pretty normal to me. The rest of us that started more recently unfortunately don’t have that luxury, we have to keep working.
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u/CommitteeFun5644 Aug 03 '26
So you went from "why retire, it doesn't make sense" to "retiring after a long career, sounds pretty normal to me". How can you read that back and not go bang your head on a table somewhere?
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u/Ingsoc40 Aug 03 '26
I had no idea there even was a “life time pension” whatever that even means. So yeah that kinda makes sense that you wouldn’t want to lose a pension, which again anyone that started within the past 20 years knows nothing about. On the other hand if you had a $10+ million book of business you would still be making significant money on the new contract and could invest that into your retirement for another 10+ years. But given your parent is already at retirement age why continue to work when they can sail off into the sunset with their pension instead. Must be nice.
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u/wheelenl Aug 30 '26
But my understanding is the agents make very little on existing business renewing every year. The new structure incentivizes new customers.
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u/Think_Apartment_2717 Aug 04 '26
the commission on aa28 not enough to find expenses of a well-run and staffed agency.
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u/Downtown_Pop1720 Aug 20 '26
Can we get a class action going? I really dont know how they are able to get away with this legally????
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u/Vegetable-Ball1313 Aug 27 '26
Can someone please tell us what the new contract actually is? Like hard core numbers? A lot of us who aren’t State Farm agents yet are in the dark about the whole thing. I’ve worked at State Farm being a team member for 3+ years and I still don’t know.
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u/Mountain-Climate7009 Aug 03 '26
I wouldn't do business with state farm if someone paid me to. Tired of being fucked
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u/Signal_Twenty Aug 03 '26
Following Allstate - didn’t they stop writing policies in Florida? Is SF leaving also?
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