Roger Smith sums up insurance withtwo words and one contraction.
"It's necessary evil," he said.
Insurance is complicated. Reams of paper arrive in yourmailbox -- documents few actually read.
But even if you did sift through the all the numbers, there is onefigure you surely will not find: your agent's cut.
Car insurance is required by law; homeowner's coverage is requiredby many lenders. We have no choice, and likely no idea how much themiddleman makes.
When we asked some of the country's top insurers, includingNationwide, State Farm, Liberty Mutual, and Allstate how much of our premiumsgo back to the agent in the form of a commission, we got nowhere.
Liberty Mutual said: "We do not publicly share our employeecompensation policies."
State Farm's reply was similar: "An agent's rate ofcommission is part of a private business contract."
That's when we asked Ray Bouchard, who runs Bouchard Insurance inClearwater.
"Your standard rates of commission are anywhere from fivepercent to 12 percent of the premium," Bouchard said.
Where does that money go? Bouchard says lots of work goes into aninsurance policy behind the scenes. And that work requires lots of people.
"We have about 210 employees," he said of his agency.
Simple math tell us that as premiums rise, as they have recently,the agent's commission increases. But Bouchard says it's not that simple.
"When I started in this business many years ago, the commissionlevels were much different than they are today," he said. "Those numbers havebeen squeezed."
Still, insurance can be a lucrative business.
Consider Citizens, the state-run insurer of last resort.
A spokesman said the company pays agents a 10 percent commission.
The company's top ten agency (by volume of policies)collected more than $18 in commissions last year alone. On average, $115 ofevery homeowners' policy in that pool goes directly to the agent.
But that is nothing compared to flood insurance.
The taxpayer-funded National Flood Insurance program is broke. Itsdebt exceeds $24 billion, according to the Government AccountabilityOffice.
And yet, insurance agents are winning with this loser.
Gary Boulware would know.
"We studied this for about seven years," he said.
Boulware, a University of Florida government professor, authored anearly 300-page analysis of the NFIP. The scope is far broader than thecommission NFIP pays. Yet, page 53 reveals a stunning statistic: insuranceagents' cut is close to a third of your premium.
"Theprivate insurance companies which collect the premiums are entitled to 31.8 percent ofthe annual premium in the form of a commission," Boulware wrote.
Bye-mail, the Federal Emergency Management Agency said the figure is closer to 28percent.
Eitherway, Boulware said consumers like have no idea that so much of their premium isgoing to their insurance agent.
"Nobody knows that," he said. "It would be very difficult foryou to Google that and find it anywhere other than somebody like myself thathas done lots of research."
Can weeliminate our insurance agent? That'sonly likely with companies that offer "direct" policies.
They advertiseheavily to switch. The commercials are comical, and constant. Andthat's where Bouchard offers a warning.
"Somebody's paying for that," he said.
That someone...is you.