Tie-in Sales

For many years TDI has taken the position that if an agent insists on writing one line of insurance in order to write another, he is committing a prohibited practice. See this 1978 TDI Bulletin. This practice, known as tie-in sales, would include demanding that automobile insurance be written in addition to homeowners. (Note: TDI does not consider the refusal by a company or agent to write one line of insurance because it does not already write another line to be a prohibited tie-in sale. For example, many companies will not write a homeowners policy unless the applicant already has an auto policy with the company. This is OK, according to TDI).

To avoid being accused of violating this both-or-none approach, here are some suggestions. Instead of insisting that new applicants move their auto as a condition of writing homeowners, simply ask for their business. Soliciting companion business is allowed and can be beneficial to the customer. Many customers may already be irritated enough by their current carrier that they would gladly move all their business. Point out the various advantages of keeping all their business with one agent or one company, such as companion policy discounts, coordinated claims service or ease of bill payment. Emphasize agency services, such as risk identification and coverage expertise, and the attention you can give to meeting the needs of their family in the long run. Remind the customer that an independent agent can keep tabs on the market and secure alternative coverage, even during the worst of times. Ideally, you will be the last agency the customer will ever need to contact. Now more than ever, the public can appreciate the value of an independent agent. Protect that image and the reputation of your agency by avoiding accusations of tie-in sales and delivering the products and services that customers value.

If you are on the losing end of another agent's violation of this prohibited practice, consider filing a complaint online at www.tdi.state.tx.us. Keep in mind, however, that your name will not be anonymous, and if TDI takes any action to resolve the complaint, your customer or former customer may be adversely affected by the resolution.