If you care about people and want to help them protect themselves from unforeseen risks and catastrophes, an independent insurance agent could be the career for you. An independent agent doesn’t sell products for just one insurance company. Instead, you have the freedom to offer your clients insurance products from multiple companies to fit their individual needs best.
Does this sound like a career that fits you? You just need a little determination and drive, and you’ll be on your way to a successful career as an independent insurance agent.
Here are some steps to take to help you get started.
To sell insurance, you will need a producer license. A producer is a term referring to anyone who sells insurance products. Obtaining an insurance license will enable you to discuss insurance products knowledgeably with clients and help you make the sale.
Each state has its own insurance licensing requirements, so specific stipulations will vary based on your location. In addition, the type of license or licenses you will need will depend on the types of insurance products you decide to sell. The two most common types of insurance licenses are property and casualty, life, health, and accident.
A property and casualty insurance license allows you to sell property and casualty insurance consisting of auto, homeowners, workers' compensation, commercial property, and commercial liability insurance. You will attend a pre-licensing course either online or in a classroom and pass a licensing examination. Then, you will take a licensing exam and apply to your state’s department of insurance for a license.
Obtaining your life, health, and accident license will allow you to sell insurance products related to life events, including life, accident, and health insurance. As with the property and casualty license, you will have to take a pre-licensing course, pass your examination, and apply to your state’s department of insurance for a license.
Here is a helpful resource for insurance producer licensing requirements for all 50 states.
You can also choose to sell personal and commercial insurance or focus on only one or the other. Personal insurance includes your car, home, life, disability, health insurance, etc. Commercial insurance consists of insurance for businesses such as commercial property, general liability, commercial auto, business interruption, workers' compensation insurance, and more.
There's no wrong answer. You will just need to develop a business plan for your agency and decide on your areas of specialty or if you want to provide comprehensive insurance services to individuals, families, and businesses. Think of the time, money, and resources you will need to invest in getting your agency up and running and what type of agency (personal lines, commercial, or both) makes the most sense for you and the people in the area you'll serve.
As an independent insurance agent, you will need agency appointments with insurance companies that sell the types of insurance products you want to offer to your clients. The appointment gives you as an agent the authority to act on the insurance company’s behalf.
If you're a new insurance agent, the best practice is to gain appointments with established carriers who offer multiple lines of coverage and have attractive commissions and opportunities for you to grow as an agent. Then, as you establish yourself, you can add niche carriers who specialize in your target markets, whether it be clubs and restaurants or churches and civic organizations, just to name a few examples.
If you are interested in becoming an independent agent for a specific carrier, you will likely find information on how to become an agent on the carrier’s website. For example, there may be an application to complete or a number to call for more details.
Before appointing you as an agent of the company, insurance carriers will look to see if there is a fit between the products it sells and the target market you are approaching as an agent. The carrier will also consider several other factors, including your agency’s financial stability, business plan, level of automation, and history of carrier appointments.
There are also some things you as an agent need to keep in mind when searching for agency appointments. For example, is the company appointing new agencies? Will you be able to meet its premium quota? Is the insurance company financially sound? You can also check out company ratings through organizations such as AM Best (for financial stability) and J.D. Power (for customer service ratings).
When you establish an insurance agency, you need to make sure it's properly protected. You sell insurance for a living, but you also need to buy insurance to help protect your investment. Some types of commercial insurance you may need to purchase include general liability insurance, commercial property insurance, errors and omissions insurance (commonly referred to as E&O coverage, which protects you against errors that you or a member of your staff may make), and workers' compensation insurance.
Insurance and other financial services agents are governed by regulatory agencies such as state departments of insurance and the Financial Industry Regulatory Authority Inc. (FINRA). FINRA has particular jurisdiction over investment professionals and firms that sell variable life and variable universal life insurance.
As an insurance agent, it's your responsibility to maintain all your resident and non-resident state licenses and appointments with your insurance carriers. If you forget to renew any of your licenses on time, you may have to pay a fee to reinstate them.
Once you get your feet firmly on the ground as an insurance agent, you will need insurance leads to generate new business. Sure, you can contact family and friends and offer them insurance, but ultimately, you'll need a way to find new clients.
Assurance offers you personalized training and pre-qualified leads who are eager to talk to you about finding the right insurance coverage for them. Find out more about joining Assurance today.
Once you are ready to get started with your own insurance business, Nectar connects you with clients who have a verified interest in purchasing your insurance products.
This article reflects the features of Nectar as of the date of publication. Features are subject to change at any time. This article is meant for informational purposes only, it is not a guarantee that using Nectar will help you achieve specific business or financial results and is not intended to serve as the sole recommendation for any business financial decisions.