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How to Become a Car Insurance Agent

Beginning a career path as a car insurance agent can be tantalizing, because of the huge safety net that comes with a constant influx of drivers needing insurance. Insurance is mandatory in almost every state, so your market share is so big that you might never lack clients. 

The qualification to become a car insurance agent slightly differs by state,  but you can complete it faster than other worklines that require a license. 

So, many people considering this field have asked the question “How can I become a car insurance agent?” And “How long does it take to become a car insurance agent?”

Many people assume that it takes a long time to be certified as an insurance agent, however, it’s not so at all. Most people can be certified as one within a few weeks, and a Bachelor’s degree is not needed.

Sounds fun right? It’s one of the jobs that don’t require that you have a B.Sc. to be able to study. 

The time you will spend before licensing largely depends on how fast you can finish your online course, which lasts for a certain number of hours. Your determination to finish at your pace will either speed or slow you down. 

You will also have to wait for about two weeks for the license to be issued to you once your exam and background running checks are completed. 

Take a look at these steps to become an insurance agent if you’re ready to enter the insurance industry.

Read: How to Get a Quote for Car Insurance

How to become a car insurance agent

1. Choose the type of insurance agent you wish to become

When beginning your insurance agent business, you will have to choose between two types of insurance agents – independent and captive.

Captive insurance agent

An agent who exclusively represents one business, usually a big national insurance provider, is known as a captive agent. The agent receives support and training from the captive corporation.

In exchange, the captive agent is limited to representing the business’s merchandise and is unable to promote rival insurers’ policies. 

A non-compete agreement is often required of captive insurance agents, restricting them from working with other insurance firms for a set amount of time. Captive agents might receive less commission since they only work for one insurance company.

Self-employed insurance representative

A person who represents multiple insurance companies is known as an independent agent. To locate the best policies and prices, the agent gives clients quotations from several insurance providers across different states.

Although independent agents can offer a wider range of products, the insurance companies they deal with provide them with less assistance and training.

It can be more difficult to become an independent insurance representative since agents must develop their brand in the markets they serve rather than depending on well-known insurers for marketing assistance.

Related: How to Get Car Insurance in 9 Easy Steps

2. Select the insurance market you’ll specialize in

There are several kinds of insurance out there, ranging from car insurance to health insurance. All of these are open for you to make your pick. Since you’re opting for car insurance, move on to the next step.

3. Complete the license requirements in your state

Every kind of insurance has a license that regulates its agents, and car insurance isn’t any different. The license might vary from state to state. For instance, the car insurance agent license needed to operate in Arkansas might be different from what is required to run in San Francisco.

4. Take the exam for an insurance license

The majority of states mandate that you finish a pre-licensing course. A lot of these are available for online or in-person learning. States offer different requirements for education, ranging from a one-day course to 20–40 hours of online instruction. 

For information on state-specific licensing requirements and costs, the National Insurance Producer Registry is a useful resource.

You must arrange your formal license exam once you’ve completed any state-mandated pre-exam requirements.

Typically, an external organization administers these tests. On the appointed day and time, you will report to a testing location to complete the online exam.

Before taking the insurance exam, you might need to provide documentation that you finished the online or in-person course you took.

5. Send in your background check and licensing application

You will turn in all necessary licensing forms to your state licensing authority once you have passed your state insurance certification exam. 

Certain states will need a background investigation and some form of personal data which can include fingerprinting. After receiving your license, you will be in a legal position to discuss and sell insurance policies.

6. Schedule a sales appointment with an insurance provider

The authority to act as an insurance sales agent rests upon your appointment by a car insurance company. To obtain an appointment and binding power, you must apply to each insurance company you intend to work for.

7. Locate and retain clients

You’re licensed. What happens next? You should start looking for new clients. Registering an agency as an independent car insurance agent and approaching friends and family are common ways for agents to start. 

One smart way to succeed is to spot new car insurance companies coming up and offer your services to them as an agent. This is an excellent method to become familiar with the systems and gain confidence when giving quotes for new coverage.

It would be wise to start marketing your agency at this stage. You could look into local advertising possibilities, make a website and advertise your business online, or join the chamber of commerce in your community.

There are lots of possibilities, and most of them will need some trial and error before you figure out what suits you the best.

8. Safeguard your agency with insurance

As a brand-new insurance agent, you should also confirm that business insurance covers your agency.  

There are various insurance plans to take into account. Let’s gloss over them.

Insurance covering general liability 

You’ll need the protection that comes from general liability coverage at your agency. Getting a client hurt in your office could raise major issues, with number one among them being bodily injury lawsuits. 

A straightforward accident like tripping on a carpet could lead to an accident and a liability lawsuit. An owner’s policy for a business might incorporate this coverage—often at a discounted cost—with commercial property insurance.

Insurance for incorrect information

Nearly all insurance companies require you to have E&O insurance coverage if you write their policies. This shields your clients from mistakes that you or your employees might make. 

When you unintentionally remove the wrong car from the insurance plan, for instance, it becomes uninsured in an accident. Your E&O coverage will handle the customer if you are at fault for the error. 

Insurance for workers’ payouts

 The purpose of workers’ compensation insurance is to shield your organization from lawsuits made by staff members. The employer will cover a percentage of an injured worker’s medical expenses and missed income if the injury occurs on the job. 

Businesses must provide workers’ compensation, even if they only employ part-timers. 

Also Read: How Much Car Insurance Do I Need?

Cyber insurance

You must safeguard your clientele’s email addresses, credit card details, and other private data from unintentional or malicious disclosure. 

Cyber insurance pay for expenses associated with a cyberattack or data theft, such as the price of alerting affected clients and providing them with fraud detection services following a breach.

How long does it take to become a car insurance agent? 

It typically takes around two weeks to become a car insurance agent after you have met the license requirement for your state. 

What to anticipate while at your examination for an insurance license?

Exam procedures are typically straightforward, particularly if you have fulfilled the prerequisites and are well-prepared. When you arrive at the appointed hour, a computer will be assigned to you. 

The majority of questions are a series of choices. As soon as the exam is over, you’ll know if you passed or not. You have the option to reschedule and retake the exam if you fail it on your first attempt.

Which types of licenses are most prevalent?

For agents who intend to work with clients in need of cars, business, and house insurance, they must hold a property and liability license.

Agents who intend to work with clients in need of insurance and annuities relating to life events, such as life, well-being, or accident coverage, must hold a life, health, and accident license.

It can be part of your professional goal to get various licenses. You will have to obtain the details from the insurance division in your state or the business you intend to represent.

Why is a license required for car insurance agents?

A license is required for car insurance agents because advertising car insurance products and closing deals with drivers without one attracts sanctions from the state.

To talk about insurance products or close deals, insurance brokers need to hold a license. There may probably be particular state and local licensing standards in your area. 

Read: How to Calculate Car Insurance

Chinwe Gladys
Chinwe Gladys
Chinwe is a car insurance writer focused on providing a clear roadmap for prospective drivers to select the coverage options that's best for them.
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