When you’re shopping for commercial insurance, you might assume you’re getting a fair comparison of quotes from multiple carriers. But what if the deck was stacked before you even saw the numbers?
There’s a behind-the-scenes practice in the insurance world called “market lockout” — and if you don’t know about it, it could cost your business thousands in premiums, missed coverage opportunities, and reduced negotiating power.
What Is a Market Lockout?
Many commercial insurance carriers operate on a “first-in” model, meaning they will only accept a quote request from the first agent who submits an application for your business. Once that carrier has your account on file—even with incomplete or inaccurate info—they are off the table for any other agents trying to compete for your business.
That means if an agent submits to a carrier before you’ve fully decided who you want to work with, they’ve just blocked that carrier from providing a quote through anyone else, even if those other agents could’ve done a better job representing your risk or negotiating terms.
Why Would an Agency Do This?
Some agents rush to submit your info to as many carriers as possible—not necessarily to get you the best deal, but to block competitors from accessing those markets. It’s a tactic that gives the illusion of choice, while actually limiting your options.
In the worst cases, an agent might submit incomplete or low-effort applications just to secure a lockout, knowing full well the quote will come back overpriced or declined. But they’ve succeeded in their true goal: removing competition.
How This Hurts Your Business
- Fewer competitive quotes: You’re not seeing your full range of options—just what one agency gives you.
- Weaker negotiating position: Carriers know they’re not competing as aggressively when they’re the only ones quoting.
- Stale or rushed submissions: Incomplete applications may result in higher premiums, worse terms, or outright denials.
- Damage to reputation: Multiple uncoordinated submissions can make your business appear disorganized or risky to insurers.
What Can You Do About It?
Here’s how to stay in control of your insurance shopping process:
Choose your agent(s) carefully, before any submissions begin. Make sure you’re working with someone you trust to shop the market strategically and ethically. We offer some discussion points here to help.
Ask for the Agency’s plan. Request a list of which carriers they plan to approach and a timeline for submissions to see how they align with your goals.
Limit submissions. Consider giving one agent the right to shop on your behalf to avoid cluttering the market. If you do use multiple agents, assign specific carriers to each one to avoid overlap.
Use a Broker-of-Record (BOR) letter strategically. If you’ve been locked out by a past agent but want to work with someone new, a BOR can allow the new agent to take over your representation with that carrier—though the carrier must accept the switch.
Bottom Line
Market lockouts aren’t just a minor inconvenience—they can skew your entire commercial insurance renewal process. An agent who plays this game isn’t working in your best interest. At Keslar Insurance, we believe in open communication, thoughtful strategy, and putting our clients first, not just chasing a quick win.
If you’re about to start shopping for new coverage or approaching a renewal, let’s talk. We’ll help you navigate the process the right way—from the start.
