Starting an insurance agency is very similar set up any business. You need to choose a business structure, register and license your business, get insurance, and more.
However, you also need to become a licensed insurance agent and learn to navigate a highly regulated area.
How to start.
1. Become a licensed insurance agent
Depending on the requirements in your state, you can get an insurance agent license in a matter of weeks or months. Here are the steps you need to follow:
Find out about your state’s licensing process. The National Insurance Producer Registry or the branch of Independent Insurance Agents and Brokers of America in your state can help you understand these specific requirements.
Decide which insurance you want to sell. They may be licensed to sell various “powers” or types of insurance. The most extensive powers include:
Accident and health or illness.
The names of these lines of authority may be different in your state. They can be licensed to sell multiple powers of attorney. Life and health insurance are often offered in one package, as is property and casualty insurance.
In general, most types of business insurance are property or casualty insurance. With property and casualty insurance, you can have personal and commercial insurance. Most agents, however, choose to specialize in one thing or the other.
Take a pre-licensing course. Your coursework should focus on the type of insurance you want to specialize in. Courses can be held in person or online in most states.
Schedule your license review. These are usually done in test centers run by outside testing companies who may notify you of the results immediately.
Apply for your license. Submit your license application to the government agency in your state. You will need to provide personal information such as your social security number, date of birth and place of residence and pay any applicable fees. If your application is approved, you will be able to sell insurance products.
If you are new to selling insurance, you may want to get some experience with an insurance company or other broker before setting up on your own.
Her Business plan outlines what your company should look like and how you want to get there. The process of writing should force you to answer complex questions, such as: B. What unique value you offer your customers and how much money you need to get started.
3. Select a company structure
Her Business structure determines, among other things, how your operating profit is taxed and how your private and business assets are separated.
There is also an insurance-specific question to be answered: whether your insurance carrier should work with a specific insurer or with many different providers.
Captive agents (agents who work with a particular insurance company) can benefit from brand awareness and don’t need to convince insurers to work with them. However, on the other hand, they can only sell a limited number of insurance policies. For example, State Farm works with a network of independent contractors who run their agencies but only sell State Farm products.
Many other insurance agency owners are independent intermediaries and sell products from multiple insurance companies. Independent brokers may have to work harder to establish and market their brand with clients and insurers, but they can forge relationships with many insurance providers.
4. Register and license your company
Before running your business, you must register with your state, usually the State Department office.
As part of this process, make sure you get a business license, sales tax permit, and any other documents your state or city will require.
Your company may also require a license from your state’s insurance department. Check your state’s requirements to find out what you need.
5. Get business insurance
As an insurance broker, you already know how important it is for your customers to be fully insured. Will Business insurance to protect your business assets.
What is best for your company?
Answer a few questions and we will put you in touch with an insurance partner who can help you prepare an offer.
6. Build relationships with insurance companies
If you are an independent intermediary, you will need to apply to all insurance companies whose products you want to sell. If they approve your application, they will give you an appointment to sell their policies.
Establishing direct relationships with insurance companies without years of experience and a customer base can be a challenge.
Joining a professional association such as Independent Insurance Agents and Brokers of America or an agent network such as Smart Choice can help you gain access to insurance providers to sell their policies. These groups can also provide marketing materials, discounts on your business insurance policies, and other resources.
If you decide to start an independent agency, you may have to look for your first customers. Start by joining your local Chamber of Commerce, attending networking events, and promoting in your local market.
An online presence is also essential. Make sure your website clearly states what types of insurance you sell and what customers you serve. Contact information should be easy to find.
If you set up an agency affiliated with a specific insurance company, you may receive referrals when clients search for agents in their area. However, you will likely need to do local marketing as well.