Glossary · Insurance agency commissions
Endorsement
An endorsement is a change made to a policy during its term, such as adding a vehicle, a driver or a location, that can raise premium, lower it, or leave it unchanged.
What it means
Endorsements are the most frequent transaction on many books after renewals. Each one with a premium change should produce a commission line: positive for additional premium, negative for return premium. Under most agreements commission on an endorsement is paid at the policy’s rate, but check your schedule for exceptions.
Endorsements are also where statements and agency records most often drift apart, because they can be requested, processed and backdated at different times.
How it shows on a commission statement
An endorsement appears as its own transaction line, often coded END, CHG or similar, with the premium change and the commission on it. A backdated endorsement can appear on a statement months after the change was requested.
Example
| Policy | Change | Premium | Commission |
|---|---|---|---|
| EX-13305 | Add vehicle | 380.00 | 45.60 |
| EX-13305 | Remove driver | −90.00 | −10.80 |
| Net | 290.00 | 34.80 |
Common mistakes to check
- Endorsements processed in your system that the carrier never paid.
- Commission on an endorsement at a different rate from the policy.
- On agency bill, an additional-premium endorsement billed by the carrier but never invoiced to the insured.
- A zero-premium endorsement listed with a commission amount, which usually needs a question.