Progressive's progressive home insurance policy is extremely basic in most cases. But to compensate for this, it partners up with an extensive network of insurance companies to provide numerous quotes for the consumer. However, if you choose to purchase a Progressive policy through an agent, you may be restricted in terms of discounts. The company does not allow agents to sell their products directly. They can sell Progressive policies to customers, but only after receiving commissions from those who buy it from them.
This type of insurance, when purchased through an agent, can be expensive because they have to pay the commissions on a per policy basis. They usually sell their policies at discounts because they can get a commission from their clients. They do not want to take a risk on the individual.
Progressive will sell its home owners insurance policies at a discount for several reasons. First, they have been able to acquire relationships with various insurance companies and agents and their agents refer prospective clients to them. Since these referrals help them generate leads, they can offer their policies at a reduced rate to the insurance companies and agents.
Progressive also has established a relationship with other agencies and brokers. For example, in order for a client to get multiple quotes from Progressive, they can call their direct agents or brokers. These agents or brokers refer insurance agents to the client and receive commissions from each agent. This allows a progressive home owner to obtain a number of quotes without having to speak with an agent or broker directly.
Another reason that Progressive sells its policy at a reduced rate is that the company has developed a network. In order for a client to purchase a Progressive policy, they first visit an independent agency or broker to obtain their quotes. After getting several quotes, they then contact the same agencies or brokers and buy their policies from them, which then refer them to agents and brokers who refer the clients to Progressive.
Once the home owner insurance policy has been purchased, Progressive collects a commission on each premium paid. The commission is usually determined by how much it costs to purchase a policy from the insurer, which is typically a percentage of the policy cost. The company continues to collect the commission even if there is no claim paid on the policy.