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Only A Fool Would Buy A Farmers Insurance Agency

Only A Fool Would Buy A Farmers Insurance Agency
August 05, 2017 06:16PM
I was thinking about buying a Farmers agency in Redlands, Ca. The agent was retiring, had about 1,274 Farmers policies in force, and was asking $205K for the agency. I became a reserve agent after I obtained my Property and Casualty license, and I spent around $300 to reach this point, training materials, cost of the license, etc. I then asked for all the agreements I was going to be required to sign to become what Farmers calls a “Career Agent.” By the way, I was working with these two “district managers:”

Yale Long

Jim Heidrich

Jim likes to pride himself being a retired Marine colonel.

I was shocked to find out that Farmers could buy me out for any reason or no reason for about $85K. For example, they could per E.4.F deem anything I am doing a conflict of interest and buy me out. They have sole discretion what a "conflict of interest" means. I am a CPA and I have consulting clients. This could be deemed a conflict of interest. See “E. Termination of this Agreement” and “H. Contract Value” of this document: [drive.google.com]

This would mean I would lose about $120K and be on the hook to close the office. They also wanted me to quit my job immediately. In other words, they wanted full control. When I objected to these absurd terms, Jim Heidrich sent me this email:


I am disappointed you did not see fit to discuss this with me before making a decision to withdraw. Your interpretation of the contract, while correct in language, fails to see why the language is what it is; a worst case scenario to prevent damage. My staff and I have worked hard to provide you a full picture of expectations so I had hoped a conversation was in order before you simply turned away.

I do want to offer that your interpretation of the contract does not support the positive attitude you have displayed to date. The contract areas you have highlighted are purposeful but do not represent any risk to someone with your ethics.

To be straightforward, your concern for the contract language should only be an issue if you see yourself behaving in an unethical manner, and that was never the impression you offered.

I would be glad to set up a call with our legal team or someone above me if you felt it would be helpful; if not then I will wish you the best. I think you could have had a very good run as an Agent and created a business with an income of your choosing for many years to come.


And Yale sent this nugget:


I'm sorry to hear about the concerns your having over the contractual language. If there is anything I can do to assist in clarifying the language or making you comfortable with the decision please let me know.

I would like to mention to you, in my twenty seven years with this great organization, I have never seen the 90 day clause used for any reason. The only time I have seen an agent terminated is immediately and for just cause, ie.. embezzlement. In-fact, Farmers is a company built on the back of promoting and fostering a platform of success rather than stripping an agency for anything other than warranted actions.

As far as the contract value goes, I can tell you Farmers is on a path of completely doing away with contract values which is why they now have paragraph G. "Sale of Agent's Service and Commission Rights". This is new language which allows agents to sell their books to an external candidate like yourself or to an existing agent. Steve England had to sign the same contract in order to have the option to sell rather than take Contract Value. Contract Value at most will be only one times the annual service commissions where a internal or external sale commands a much higher multiplier.

I hope my comments gave you a little better understanding. If you would like I am more than happy to chat and share my thoughts as I have been through many of these signings as well as many conversations with both buyers and attorneys.


Yale Long L.U.T.C.F, CSD
Member of President's Council
District Manager
Farmers Insurance
1700 Iowa Ave Suite 230
Riverside CA, 92507
License Number: 0A95391
909-254-0318 (Office)
909-254-0327 (Fax)

When I wanted them to change the boiler plate contract, this is what I was told:


You are correct that this is all business. And I concur that the terms are clear; however, I do not interpret them as a risk but as a safeguard to you and Farmers.

Farmers will not change the language in the contract, it has served us well for our history. When you refer to "contract price" I assume you refer to the stated contract value, which is not the contract price. The CV is established as a fail safe to our Agents; regardless of your situation you always have an out by being able to sell for CV. The only thing that would preclude this is illegal activity.

Your interpretation of the contract is that Farmers can randomly step in and take the book of business from you and settle at contract value, which is 50% after 12 months for a book under 1500 policies. While this scenario could happen (cannot find any previous examples) in a worst case situation, it simply does come into play for anyone who enters the business with even the most marginal drive and desire to excel.

My biggest challenge here is understanding your reaction to the contract language. Obviously someone is offering advice to beware, the risk is too great. Reality is this was presented as a great business opportunity that could provide you the level of income you desired and the ability to control your future. You appeared to concur in and fully support all information provided to date. To suddenly view this opportunity as high risk and a potential loss of half of your investment simply does not align. Can bad things ever happen, yes. However, someone with your desire and drive enters with an absolute minimum of risk and the greatest percentage of high success.

I know Yale also in communication with you and both of us just want to ensure you see the level playing field. There is no intent to convince you to take any action you do not fully support. We see this as a win-win and apparently you see it as a possible loss. Most unfortunate.

Glad to discuss if you like. If you are set against moving forward then please send me an email requesting you be terminated as a Reserve Agent and I will initiate.


There you have it. If you want to be a Farmers agent you will be required to simply trust Farmers will not buy you out for far less than you paid for your agency or far less than it is worth. Anybody would be a total fool to buy a Farmers agency given these terms. I have still not been told why I was not told up front about these absurd terms. I have asked for my $300 back, but have been ignored.

Frank Adomitis

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You need to talk to agent Farmers terminated.
I was agent for 6 year and when I was vested with compancy, Farmers decide to engineer my termination, I got zero out of it and lost my FINRA license and state because of employee that Farmers hired to work for me. You better off being broker in the long run you will better off since no one will kick you out and take all your policy. Farmers took all of my 1,000 PIF and paid me no contract value, I sued them and they said it written in the contract in which no one said anything to me. Broker you start weak, but once you are up in running, you will be strong. With Farmers, you start with fake support like DM, who will said they are independant coNTRACTOR ANd has nothing to do with Farmers in court, Farmer make you seem like you are everything and once they are done with you they, DM, benefit from your policy and profit it by sold to other agent. you will get zero...

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I was recruited out of a pretty big college by a Top Farmers District manager in CA in 1989. I made the program and turned down several other lucrative career options. I spent 30 years watching Farmers greed ruin the company with their "management team" which does nothing other than take 16% off the top of premiums ( that's why they are so high) into their own pockets. The DM's are paid & hired liars. Farmers terminated me for No reason. Have a professional office with regular hours. No funny stuff with their premium money. Had perfect 10's on every Medalia customer rating I received. Was a solid B Agent with around 400 policies in force and mostly high in premium so it was a pretty good monthly check. No violations of contract at all. Was told by Bill Matlock the DM that I needed to do Farmers Marketing program for 300 dollars a month. I disagreed and told him that was "MY" choice not his. This college football walk on , pint size mouth tells me I will be terminated if I don't do it .. Sounds like Extortion Bill Matlock ?? . I did the plan and he said they will leave me alone and he couldn't "carry" me any more. WTF does that mean ? Were u paying my rent? my phone? my advertising? my benefits? NO. Just stole my nice neat book of business because Farmers exchanges have lost 9 million PIF since 2007. The company is having Fidelity issues and has cut commissions and raised premiums yearly for 30 years straight. My UQI was also a 3 and I always went to the district meetings. I was and and AM a very good Insurance Agent and Agency owner. Ask my Clients. I wouldn't buy a Farmers book of business if they paid me to take 1. The business model is a disaster for the Agent and the family. The reason they want you to have licensed people in your office is so they can groom them for manipulation and intimidation. Don't do anything with Farmers if you are an agent or an insured.

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Re: Only A Fool Would Buy A Farmers Insurance Agency
November 19, 2020 06:25PM
Hello all,

I was referred to this site from
am exploring opportunities to start an insurance agency in Illinois and came across Erick Chavarria. He represents District 33 at Farmers and makes the opportunity sound really good with them and really bad with other companies. I believe his boss is Kyle Wetzel who is the District Manager for District 33 and Kyle would be my boss if I join Farmers. My gut is telling me something is wrong. Does anyone here have experience with Erick Chavarria and Farmers?


Edited 2 time(s). Last edit at 11/20/2020 02:01AM by administrator.

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Wow.. always read the fine print. Thanks for this info. They make it sound like they are protecting their business from someone who may or may not have done something illegal. Crazy.. If that were the case why not properly valuate the business? Why do they get to come in and buy on the cheap? It makes me wonder if you can trust the entire organization in a host of other areas...

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yes, only a fool would buy an agency. If you are buying and agency because of the income stream and think you can just sit back and do nothing moving forward, then you are a fool. And yes the company is trying to recruit people to buy agencies but the intention is that you will have the willpower to seize the opportunity to grow the agency. I was with Farmers for 19 years, and found them to be, overall, a fair company to deal with.

That being said, I also found the DM's to be the lowest form of life on the planet. When my son was close to death with cancer, my DM said to me that no one cares, and get back to work. And with those words, I walked out and am know free of the tyranny of their agency system. Hoping that that DM suffers the worst of health problems, and lives long enough to suffer through them.

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What responses did you get from this?

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