How can I become an independent insurance agent?
82A subject near and dear to my heart, as I was once an independent insurance agent. The "how to" is very simple. Each state regulates the insurance business inside of its borders. So the first step would be to go to your states website and see what the applicable laws and regulations are. Some state require sponsorship from a company some do not.
If your state does not, it may require a course of a specified number of hours for Property and Casualty, and also for Life and Health. Most require some sort of ethics training usually around 12 hours for ethics and about 40 hours each for P and C, and Life and Health. After the course is taken you usually must sign up for a state administered exam. Depending on the states requirements upon passing you will be issued a license. That is the easy part.
To be independant you must contract with the companies you will wish to represent. These company's will require you have what is called Errors and Ommissions Insurance. Think of it as malpractice insurance for the financial profession. In the industry they shorten the term to E and O. Once you have E and O insurance you can go to a link on the webpages of desired companies, that will give you instructions on how to contract with them. Most will do a credit, and back ground check on you. Most states have laws that require an insurance agent to prove he is solvent. After contracting paperwork is complete you will recieve an intro kit. It will have your agent ID number for that company, and it will have some instructional material on how to do things with that company.
The next thing will be your continueing educcation. Most states and companies require a certain number of annual hours be completed each year, and one of the first ones you will be required to complete will be an anti money laundering course. There many types of shady people out there, that are more than happy to take advantage of your need to make a profit in your business. This class will teach you how to spot shady customers and how to report this activity. You don't want to get caught up in a racket, as it will cost you your license at a minimum and maybe even your freedom.
After licencsing, insurance, bonding, and contracting, comes the really hard part getting in front of customers. Marketing your business will be the most important part of being an agent. You have to get in front of qualified clients and close the deal. Again, each state has rules and regulations governing your marketing particularly in regards to senior citizens. Good luck.
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Comments
Thank you for explaining the process. I am already licensed agent but I have not decided whether to work as a captive or independent agent. I have known a few friends who are captive and they didn't like it. They have been in the industry for quite sometimes but wished to be independent but can't seem to get out of it for now.
Being no experience and becoming an independent right away, is that going to be a problem to become independent without experience? I feel comfortable doing the marketing side of it. I know some of them wants to see if you have an employees. I am starter upper. I appreciate every advice you can give.
Thank you for your input and providing us guidance on the process.
Nimby
Nimby,
I would have to say the hardest part about starting up as an independent is the contracting process.
To do that you will have to make contact with the companies you wish to repressent, will have to contract with them, and they will send you a start up packet to start writing business with them.
They don't always give good info on how to write business with them. I just fill it out the best I can and send it in. Someone will call with any specifics you need.
The next part is finding a good examining company to work with. I use the phone book.
Lastly, is keeping the new clients coming and the old ones happy. I find getting new business to be the most difficult.
TMG
I wish to start an agency. It is difficult getting companies to respond. I have been working in claims and risk management for years have my CPCU and AIC. I need to change my license to be an agent in my state, but doing so without any insurance company contacts will delay any agency income and shut down my claim work. I need to have agreements ready when I switch my license. Any advice on how to get them to respond to me?
oopsj says:
13 months ago
Starting off as an Independent Insurance Agent may be one of the hardest things anyone can start off doing. You have no income and lots of out going money. E&O insurance you mentioned is 10 to 11 times higher for an Indepentent Agent as that of a Captive Agent. A Captive Agent is one that only sells for one Company. Most of the time they are given a draw and office.
I've been an Independent Agent for 20 years. it does have it's pluses.