What is an override in insurance?
An override is commission earned on someone else's sale, equal to the gap between your contract level and theirs. If you hold 100% and your producer writes at 80%, you earn 20 points on their business. Nobody is charged for it — it is a division of commission the carrier already makes available.
This is the most misunderstood mechanic in agency building, usually in one specific way: people assume the override is a fee taken from the producer. It is not. The carrier makes a fixed amount of commission available on the product, and levels divide it.
Overrides are why recruiting scales an income in a way personal production cannot — and why they are only worth anything if the downline actually produces. A large downline of inactive agents pays nothing.
The obligation runs the other way too. The spread is what funds whatever you provide: leads, training, contracting, technology, case support. An override with nothing behind it is a recruiting problem waiting to happen.
| Annualized premium | $1,200 |
|---|---|
| You hold | 100% |
| Your producer writes at | 80% |
| Your override | 20 points = $240 |
| Producer receives | $960 |
Illustrative. Overrides are paid by the carrier out of available commission.
Longer read: /features/business-tracker#commission-tracking