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How to Start Your Own Insurance Agency

Updated on January 29, 2009

Interested in Starting Your Own Independent Insurance Agency?


Well, I started out my own insurance agency from scratch. I never had any insurance training. Or even any experience selling or dealing with insurance.

But throughout my life, I always thought insurance was a weird thing. We're required, even if we believe otherwise, to purchase and have insurance. Every year, I easily spend over $1000 on auto insurance and another $2,000 in health insurance. And a couple thousand more in homeowners insurance, flood insurance, and life insurance. I do also own a small business, so we pay insurance on our commercial vehicle, employee health insurance, worker's comp, liability insurance, and a different set of error & omission insurances as well. It's a lot of insurance, but to date, I haven't been able to use any of them yet!

Of course, insurance in theory is a nice thing. Many of us all pitch in to cover for the few that may suffer a loss. Insurance is great when we need to use it. But for the many of us that end up never using it, it's a lot of cost to have to deal with.

Anyway, I thought it was a lucrative business to get into. So I did. And this is how I did it.

Business Model of the Insurance Agency

Like in all my Hubs, I like to talk about the business model of a given business right up at the beginning. It's always nice to know the money aspect of the business before doing anything further.

The business model of an insurance agency is all about building a book of business, or in simpler terms, building up your clients. Why? Because you get commission on the new business that you write and better yet, you continue to get commission as long as your client keeps renewing the policy with you. So it's all about client services, building up your client list, and keeping your clients happy so that they will stay with you throughout the years of your career.

As you know, insurance agents work on commissions. Here are an approximate commission amounts for each of the different insurance products you may write:

  1. Personal Auto: 12-15% Commission on New Business, 10-15% on Renewals
  2. Health Insurance: 15-20% Commission on New Business, 10-20% on Renewals
  3. Commercial Insurance: 12-20% Commission on New Business, 10-20% on Renewals
  4. Life Insurance: 80-120% Commission on New Business, 2-10% on Renewals
  5. Homeowners & Flood Insurance: 12-20% Commission on New Business 12-20% on Renewals

So as you can see, by building up your client list, you can have residual income as long as you service and keep your clients happy. It's really a pretty cool business model.

You can also make additional money at the time of new business in the form of a broker fee. A typical agent may charge somewhere between $50-$300 as the broker fee, and this is on top of the commission you will receive from the insurance company.

People in the industry will say that you can make more money servicing business clients because commercial insurance policies are much more compared to the personal insurance. Would you rather earn 12% on a $400 policy or a $4000 policy? Being able to service commercial clients will mean higher premium which means higher commissions for you. The problem with this is that commercial insurance will typically require additional training and experience because to be a good agent, you'll need to understand your client's business and its risks.

So this is how the business works. If you're excited enough, I hope you can read through the remaining portion of this guide so that you can set up your own insurance agency!

Little Disclosure before Going Further

This HubPage only covers insurance agencies that want to operate and get licensed in the State of California. This is where I got my license, and worked as an insurance broker. Each state has its own rules, so if you are in a State other then California, you might want to use this manual only as a guide to understand how the industry works in California, and how it may work in your state as well. For you people in California, I tried to go through each and every step to start out your own agency.

If you've been working in the industry for a while, it maybe a time to get your own insurance agency up and running. It's never fun to have to split commission with your broker.

Step Number One: Get Licensed!

The first thing is first. You need to get licensed. You need a license to sell insurance in the State of California. To get a license you'll need to contact the Department of Insurance.

The Department of Insurance's website can be found on Google right away. Be sure to go to the California Department of Insurance's site. Not New York, not North Carolina. But California. There, you can find all the requirements to become an insurance agent.

When starting out, there are only three options of licenses you can decide to get:

  1. Personal Lines: This allows you to sell, personal lines, or non-commercial insurance products. Mainly the biggest insurance product in this category is the Personal Auto Insurance Policies and Homeowner's Policy.

  1. Fire & Casualty: This license is sort of like an advanced Personal Lines license, where you can sell Personal Lines, AND Commercial insurance. Examples of Commercial insurance products are like commercial auto, business owner's insurance policy, and professional liability insurance.

Since the Fire & Casualty and Personal Lines have similar educational requirements, I would recommend getting your Fire & Casualty license instead of the Personal Lines. The benefits as to getting the Fire & Casualty license far exceed the Personal Lines. You'll just need to study a bit harder for the test.

  1. Life Agent: This license is completely different from the two above, and allows you to sell health and life insurance. For some reason, getting into business as a Life Agent is much easier then through a Fire and Casualty license.

With regards to becoming your own boss and operating your own insurance agency, I would recommend you to get both the Fire & Casualty license as well as the Life Agent license. By obtaining both, you become capable of selling auto insurance, commercial insurance, life insurance, and health insurance. The versatility will lead to increased business opportunities for you because you can cross-sell to your clients.

Step 2: Go to a One Week Course & Take the Test

There are several schools you can attend to satisfy the educational requirements to take the test with the Department of Insurance. Two of the most popular schools are Kaplan Financial ( and AdBanker ( Personally speaking, I attended both classroom sessions (one for life & the other for F&C) I thought that Kaplan Financial did a much better job teaching the class then AdBanker did. I'm sure it all depends on the teacher though.

Anyway, complete the one week course, and apply to take the licensing exam. Insurance exams have the rumor to be relatively easy, but that seems to be not the case. You better study for it, or you will likely fail. It's pretty difficult to pass.

Once you pass the exam, you'll be licensed as either a Fire & Casualty broker or a Life Agent. Preferably, you want to see both designations on your license. Regardless, after you get the license the you can start working to build your business.

Step 3: The Legal and Administrative Things to Do

Organizational License or Not

Although this is not required, you should consider forming a LLC or a corporation for your agency business in order to protect yourself from any personal liability claims that may end up costing you everything you own in your life. The decision to form a LLC or a corporation is an entirely separate issue, and I recommend you read books from or talk to a CPA or a lawyer to see if this is something you should do.

I do personally recommend you form some type of legal entity. And by doing so, you will need to get an organizational license with the Department of Insurance. You are able to get an organizational license as long as you or one of your officers has a valid insurance license.

An organizational license will cost you a few extra dollars but it is recommended. Rather than advertising your agency as John Smith, Insurance Agent, you can advertise it as Smith Insurance Services, which does have more credibility to your name. However, the decision is up to you.

Surety Bond

Once you have your license(s), you will need to obtain a surety bond. A surety bond is similar to an insurance where the surety bond company may pay a consumer for the any contractual agreement or services that you fail to deliver to your customer. They are basically a guarantor that you will be taking care of business to your customers.

Surety bond for the insurance agency was relatively inexpensive. When we got our surety bond, it was good for three years, and it was less than $100 for the three years. You can find companies that sell Surety Bond for an insurance agency by using a simple Google Search or through an industry journal like Insurance Journal

E&O Insurance

One of the biggest obstacles for in starting up an insurance agency is obtaining your errors and omission insurance (E&O) for Property and Casualty. An E&O insurance protects you, the agent; from any errors or omission that you have performed that caused a significant loss to your clients. Standard policies start at $1 million of liability coverage, and insurance companies that you want to work with will expect you to have that amount of coverage.

Since new agents are a huge risk for E&O insurance companies, it will be extremely difficult to even obtain a quote with an E&O company. If you are an established agent with at least a few years of experience, it should be a little easier to get an E&O insurance. However, for new agents that are starting out of scratch, you should run into a lot of hard work, as I did.

After a rigorous search, online and through insurance related forums, I was able to find a company called Colony Insurance. After talking to them and persuading them that we will not be a significant risk for the E&O Company, I was able to get an E&O insurance from them for about $3000 a year.

On the contrary, it was much easier to obtain an E&O Insurance on the Health & Life side of the business. Generally an E&O insurance in this side of the industry will cost you approximately $500 a year, and Blue Shield had a great program that I was able to use right away. It is recommended that you start off right away selling health and life insurance to your clients, and with that experience move to the P&C side of business. E&O companies in the P&C side will like the fact that you've been selling insurance in the past, and they will be more willing to give you a quote for insurance.

CRA Account

CRA stands for a Commercial Requester Account with the DMV. Basically, this is something you will need to setup with the DMV if you expect to sell personal auto or commercial auto policies. It is an application process that takes roughly 2-3 weeks, and it verifies you so that you can access DMV records. You will need this account prior to setting up some software in the next section.

Step 4: The Software


As an independent insurance agency, one of the biggest advantages that you can offer to your clients is the fact that you can shop around for insurance. Ever wonder how we can shop around for insurance for our clients? Well it's very easy these days thanks to the software we have available. The following software applies to mostly personal line items, like auto insurance.

FSC Rater

FSC Rater by Fiserv is the standard quoting system in California. ( FSC Rater is a pretty fascinating tool, and it lets you glance at any given insurance company's rate all in one click. You simply enter the insured information, i.e. name, address, driving experience, driving record, and they coverage that they want. FSC will then come up with a quote for the companies you work with.

The amazing thing about the FSC Rater is its ability to quote any insurance company insurance company that write insurance in California. So have you seen that Progressive commercial which claims it will come up with quotes of other companies? You can basically do the exact same thing on FSC Rater, but with any company. You can even get a quote for companies that you don't do business with.

The most efficient aspect about using the FSC is a feature called "Bridging." Basically, "Bridging" means you can transfer all of the data that you entered into FSC into the insurance company's own system. You "bridge" the data into the insurance company's system. You won't need to re-enter data, and the quote information should match what you saw inside FSC Rater. All you need to do are some final approval processes and authorization to bind the insurance with the insurance company.

FSC Rater is a great tool, but it does come at a fee though. You have to expect to pay a monthly fee of about $285 a month per single license of FSC Rater. It's not cheap, but you'll need to consider it as a cost of doing business if you plan to do personal lines insurance.

You can call FISERV to setup an appointment so that they can do a demo for you. It's free for a demo, so I would recommend you get it personally so that you know exactly how FSC works and what its features are.

American Driving Record (ADR) & Motor Vehicle Report (MVR)

MVR is a commonly used report when writing auto insurance, and it stands for Motor Vehicle Report. Basically, this is a report of your driving record. It is supplied by the American Driving Record ( and through the use of their software called Comprise, you are able to bring up any person's driving record as long as you have their California Driver's License Number and their last name.

This is a required tool to get to provide your clients with accurate quotes. You will need to run a MVR for each client, and enter their driving record into the FSC Rater to account for any violations or accidents that they may have been involved in.

The MVR does again have a fee associated to it, and it is about $3 per report you obtain through them. By using the "Instant" feature, you can bring up a driving record of your client immediately.

Agency Management Software or Customer Relationship Management Software

Once your agency starts to grow, and you have considerable amount of customers in your books, there may come a time where you can invest in an Agency Management Software. Basically, an Agency Management Software helps you keep track of your clients in terms of their renewals, cancellations, and any other customer service and management related issues. FISERV, the company that provides the FSC Rater also has a software called the FSC Manager that you may want to get at a later time.

Customer Relationship Management software or CRM may do similar things. Personally, I use a CRM software over an Agency Management software because of the type of business we are in. The solution we use is provided by, and it's a very user friendly tool that helps us to keep track of our customers. The fact that it is an Internet based solution is extremely helpful, and it allows you to access information in and out of the office. CRM will allow you to improve your sales processes along with customer service processes, and we found it extremely useful managing our customers and keeping them happy.

Step 5: Getting Appointed with Insurance Companies

If being able to obtain the Errors and Omission insurance was the hardest thing, the next most difficult thing on you "To Do" list will be to get actual appointments with insurance companies. Here you are basically asking the marketing representative at each insurance company that you want to work with them, and it is in their best interest to do so. You'll need to convince them that you will be able to write a certain number of businesses each month so that it will be worth their time in order to appoint you to write insurance for their company.

It usually helps for you to have a business plan, and how you plan to maintain and grow the amount of business you write for them on a monthly basis. The insurance companies want to see realistic numbers so that it's worth their time. The first company will always be the most difficult to get appointed with. It helps if you have some connections or know some people within. If not, convince them through your passion and business plan that you are serious and will be good to do business with.

The first company that appointed us was AIG Auto. The company was great because AIG is always looking to expand their market, and they had a system that didn't require us to have FSC to start out with. At the initial phases of the game, forking out $280 a month for the FSC Rater with no appointment with insurance companies was a big risk to take for us. AIG accommodated us well, and we've been working with them ever since.

Loss Ratio

One thing that gave me hiccups when I was filling out the appointment application forms with the insurance companies was what they called "Loss Ratios." At the start up phase I had no idea what that was, and I didn't know what to put on the application; especially because I didn't have any business or loss ratio to refer to.

Loss ratio is basically the amount of loss your clients have versus the amount of premium you write with a given insurance company. It helps to understand what kind of market of customers you typically serve. The lower the loss ratio, the better since that means your clients are not getting in an accident and making money for the insurance company.

To give an example, say you have 10 customers, all with an annual premium of $1000. You have written $10,000 worth of business given that all of your clients stay with the insurance company until the policy expires. One of your clients gets in an accident. The accident ends up costing the insurance company $10,000 to fix the other person's car, and pay for their medical. At this point, your loss ratio will be 1 (100%), or $10,000:$10,000. You've written $10,000 but your client has cost the insurance company $10,000. They are at a break-even. You'll need to write more business to help the insurance company make money.

Insurance companies know that insurance works in the law of averages. They prefer loss ratios of 50% or lower. If for some reason you have a market that seems to get into more accident then the average, they may decide to fire you later. At the start up phase, they may decide not to appoint you.

Managing General Agents (MGA)

A managing general agent (MGA) is a person or firm authorized by an insurer to transact insurance business who may have authority to bind the insurer, issue policies, appoint producers, adjust claims and provide administrative support for the types of insurance coverage pursuant to an agency agreement.

Basically, these are middleman that can help the smaller independent agents like yourself and me. In some cases, getting appointed with a certain insurance company becomes not favorable or feasible because you know that you will not be writing enough business for them. As an example, say you have a cousin that is a plumber and that allows you to write a commercial insurance policy in this category each year. But because that's not your core business competency, it will be very difficult to find and get appointed with an insurance company that writes these kinds of business. So in cases like that there are companies like Insurance Noodle, which will allow you to be able to work with companies that write insurance in this industry.

By using a MGA like Insurance Noodle, you will need to split commission with them. However, it allows you to become more versatile in offering different product lines to your consumer base. Many agents use Insurance Noodle and other similar companies with great success.

Step 6: Market Your Business and Sell, Sell, Sell!

So at this point, you are ready to get yourself rolling and start selling insurance to everybody around town. As in any business, marketing is the single most important aspect of running your own insurance agency.

Each of these sections are a whole different post, and fortunately for you, I have posted a lot of good information for you already. Be sure to check it out.

How to Create a Marketing Plan

Here's another link for a retail sales process that I posted. This post is related to a cell phone store sales, but you should be able to used it in insurance as well.

Sales Process

You should also check to see if owning your own business is right for you.

Are you an Entrepreneur?

Step 7: Associations and Continuing Ed

Once you have everything in place, and you are selling insurance, it is time for you to start networking with other agents and representatives from insurance companies. There are several associations you can join to exchange information, learn, and network with other agents.

It is recommend that you join one or two of these associations once you have the time and resources to attend their meetings, and get the most benefit out of these associations.

Latin American Agents Association (626) 444-0999

Western Insurance Agents Association (800) 553-4221

Insurance Brokers and Agents of the West (800) 772-8998

And Many More...

Continuing Education

Continuing education is key to making a career out of what you do. The State of California continuing education requirements that you must satisfy every couple years, and most of them can be done online. They are basically there to keep your knowledge in the insurance industry as current as possible to maintain your professionalism in the job.

If you are ambitious enough, you can also try to go get advanced insurance licenses such as:

  • CLU® - Chartered Life UnderwriterTM
  • ChFC® - Chartered Financial ConsultantTM
  • CASLTM - Chartered Advisor for Senior LivingTM
  • RHU® - Registered Health Underwriter®
  • REBC® - Registered Employee Benefits SpecialistTM
  • CPCU® - Chartered Property Casualty Underwriter®
  • ARM® - Associate in Risk Management®
  • AIC® - Associate in Claims®

It is really up to you as to how motivated you are, and how successful you want to be with your career.


Thank you for reading this far and I hope that the information contained in this HubPage was beneficial for you. I am constantly striving to improve this page so please email me for any questions, comments, clarifications, corrections, or your personal experiences in your road to making your own agency into reality.

Thank you and best wishes to you all!


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    • profile image

      George 8 years ago

      This was a very helpful article even though I am in the state of ohio. I have been searching for a little insight as to how to start an independent agency and this was the first one that actually had some help!!

    • how2start profile image

      how2start 8 years ago from Orange County, CA

      Hi George,

      Thank you for your comment. I'm glad to hear that the information was helpful. I wish you the best of luck with your new agency!

    • profile image

      ab 8 years ago

      I am in agent now and it seems pretty will written and down to the t...

    • profile image

      Aida N. Rualo 8 years ago

      GREAT, GREAT information on how to start an independent insurance agency. Thank you so much for unselfishly sharing these invaluable ideas to us, who want to start an agency.

      I have a license in Property & Casuaty ins. for more than 25 years. Now I wanted to start my own independet agency. Doing my research PIA (Professional Insurance Assocaites) based in San Carlos, CA offered to be an affiliate with them. Going through their contract I was not at all excited. PIA is no 8 in California. Who are the 1st seven agencies? - who I can affiliate with to start?

      Would you please advise me? I desperately needed to find out at least 2-3 more ins. agencies to do comparison, before signing a contract with PIA.

      As always, thank you so much for your feed back.

      Forever grateful,

      Aida N. Rualo

    • profile image

      Tee  8 years ago

      great info. some day i would love to open my own agency. i am a licenced agent working for an independent agency right now. can you tell me if i am getting ripped off or not? i am splitting 30% of my commission with the agency for every new policy i write and 70% of my commission will be split to the agency if it renew. Does that seem fair? I am new in this business so i really do not know what the norm is. thank you for your info

    • profile image

      Rick 8 years ago

      70% if they renew doesn't seem fair. It's whatever you're comfortable with and if this indy agency is willing to negotiate with you or are they giving you the old Tony Soprano routine? "75 25 in my favuhh" If you're new to the industry, go with a reputable company like Farmers or State Farm or Allstate or Metlife where they don't play games with your money and lie about.

    • profile image

      Yonas Liben 8 years ago

      This is very beneficial. I commend you. I wonder if it works for Texas

    • nancydodds1 profile image

      nancydodds1 8 years ago from Houston, Texas

      Its very nice hub about insurance agency. Recently i added one more hub on Mortgage Calculator feel free to check this hub.

    • profile image

      PJ 8 years ago


      Thanks so much for the info. I am still studying for my license and I was wondering how to even to open a company and this article has been an eye-opener.

      Thank You Thank You.

    • profile image

      tamron lenses 8 years ago

      nice post

    • RGraf profile image

      Rebecca Graf 8 years ago from Wisconsin

      Very informative hub!

    • profile image

      AngelChavez 8 years ago

      Very nice article, i have been an insurace agent for over 15 years and worked for farmers, allstate and 21st century. I got to a point where i was like, I know i can have my own company, your article really helped alot and gave me some ideas and new outlooks interms of what to look for, thank you very much

    • profile image 8 years ago


    • profile image

      Jacob 8 years ago

      I was curious if you started out with an office? or was it a home office?

      did you rent, or own. Is it possible to start off with a home office, to cut costs.

      Was it really difficult to get insurance companies to sell for?

      Thank you, your article is really helpful.

    • msbev9 profile image

      msbev9 8 years ago from chicago, IL

      Never actually thought about selling insurance, but after reading your hub, looks like a great idea in these times!!

    • prasannasutrave profile image

      prasannasutrave 8 years ago from mumbai( india )

      Very nice hub.The information disclosed are valuable and useful.This will help a lot to all insurance fields personnel.

    • profile image

      actusreus 8 years ago

      Good hub. I'm in a position where my wife is being considered to take over a State Farm Agency that is 1 of 5 in a town of 60k people. She would be the only female state farm agent in town, and one of 2 female agency owners from any brand in town. She just got laid off from a job that had very good benefits and paid 65k a year. My questions are: Is this something that could potentially be more lucrative than that? What, given that size of town is the high end, low and, and probable median range of her income potential? Does she get to keep the accounts she inherits? What are the average start-up costs? And finally, what kind of hours is she looking at?

      Thank-you so much for you help.

    • profile image

      Evelyn 8 years ago

      Hi. Thank you for your information about how to start your own agency. I am in that process right now, and I am wondering if you think is a good idea to start this type of business from home? I am a little afraid to start from an office and get into a one year lease without much income. Can you please advice me? I have been in this business for almost 10 years, so I know my product very well. Please advice?

    • profile image

      Noel N. 8 years ago

      Thanks for this very valuable blueprint for starting an insurance agency. Thanks also for being unselfish in sharing these priceless information for free. More power to you and your business. I am in the process of obtaining my Property and Casualty License. What you shared to me is a great gift. Thank you very much.

    • profile image

      BlogMom119 8 years ago from Stamford, NY

      This is awesome. Lots to consider during these times. Excellently written.

    • profile image

      Odeneho 8 years ago

      Thanks a billion for your article. Very useful, I am starting a new agency as well!

    • profile image

      Marty 8 years ago

      For small isurance companies that have been around for decades what would you say is the number one obstacle they have to get over in order to start growing the business again.




    • profile image

      Anthony 8 years ago

      Personally, I think most insurance company is a big scam...When time comes for them to pay-up they give you 101 forms to fill out, long period to wait, then they try to not approved you.

      All the insurance companies doing is taking peter money and used it to pay for Paul problem while the insurance company hoping Paul will not have a problem in the future. Now Peter premium going to be increase because of his problem because peter is now too risky....Its all a scam.

      I have an idea, why not start a Home Owners insurance company in FL or Katrina...?

    • profile image

      Ismael 8 years ago

      I've been looking for this information online for a long time. Thank you!

    • profile image

      tarot readers 8 years ago

      very help full articles, thanks mate

    • profile image

      Steve 8 years ago

      Good information. I would recommend looking at EZ Links for auto and home quoting. Its much cheaper than FSC but does not have all the companies. If you only work with a few of the major companies EZ Link will work for you. I looked at several MGAs and options to get access to as many insurance companies as possible and joined Professional Insurance in San Carlos. They have just about all of the companies I need for auto, home, business and work comp. They also have Allied which no other MGA has. The commission split is very good compared to other MGAs and no fees. Given the companies I now have access to through PIA I can insure just about anything. My partner and I have been working with PIA for several months the service is surprisingly very good since most MGAs are slow to respond. They are definitely worth looking into.

    • how2start profile image

      how2start 8 years ago from Orange County, CA

      Hi Steve,

      Thanks for your comment.

      I am going to guess your comment above is semi-spam, but the information is also helpful, so I approved your comment.

      FSC has been the standard rating software in the insurance agency, but it sure is a bit expensive. If EZ Lynx has a cheaper monthly fee, and does provide rating and bridging to a variety of insurance companies like you say, that maybe the way to go for some people. I have been out of the insurance business for about a year, and have never heard of EZ Links.

      I hope everyone who sees Steve's comments above can check for themselves if EZ Links is right for you or not.

      I have heard that PIA is very good.

      Thanks again for your comment!

    • profile image

      James L. Young 8 years ago


      I just ran across your article while doing research for an insurance textbook (on another topic). Formerly, I was an insurance continuing education coordinator 8 1/2 for in San Diego and am still writing continuing education textbooks for them. I'm forever getting calls and emails asking for information on how to start an independent insurance agency. Your article is the only one I have ever seen that addresses every step/point necessary to start such a business. I will link your information to my blog, my website, and will offer it to everyone who asks the question about how to start an agency.

      Thanks for a much needed and informative document that should be helpful to many new agents/brokers.

      Jim Young, CA PC Broker, La Mesa, CA

    • how2start profile image

      how2start 8 years ago from Orange County, CA

      Mr. Young,

      Thank you for your kind words and a link from you blog. In the world of Internet marketing, a link is the greatest compliment.

      I wish you the best with your insurance textbook!

    • profile image

      Selma  8 years ago


      My name i selma and I've been working for a independent insruance Agency for a little over 4 years. I have my property and causalty lisence and I am also bilangual. I dont have any commision. I asked for commision and they said no. I did work for a differenct independent agent before but i didn't have my lisnece. I've been in insurance business since 2001. I got my lisence Oct, 2007. I write a lot of business because i am bilangual and customers like to come and have someone explain the insurance in there own language. I write couple policies every week. There is Agents here that do get commision and they dont write as much as i do. I am just wondering if you can give me an advice of what to do as far as the commision or if i should just get my resume going. Also the info that you posted about opening your own agency is grate. I would love to do that but i want to first get a little more experience in Insurance business.

      Thank you,

    • how2start profile image

      how2start 8 years ago from Orange County, CA

      Hi Selma,

      Thank you for your comment.

      It does sound like your agency is not treating you very well.  I'm not sure if you have a salary arrangement with them or not, but not getting commission will probably not motivate you to sell as much as you'd like.  Insurance agents generally work on commission only basis, so my guess is that you have some base salary that you receive.

      Any insurance agency is a business, and since it is a relatively low margin business, the owners may decide not to pay you a commission if you are paid a salary. This is especially true if you are only writing personal auto policies.  That is not where the big money is in this business. It maybe up to you to decide to go with a lower salary base, and negotiate your company to pay a commission for every sale that you make.

      With regards to your career move, since it does sound like you have some experience selling insurance, you may want to switch over to a better company.  Big name insurance companies that offer P&C, Life, and Health maybe the way to go if you want to gain experience selling different types of insurance.  By working at a big company, you can probably gain enough experience to go off on your own when the time is right.

      Seeing that your name is Selma, I'm going to assume that you have a Spanish-English bilingual skill.  You're in luck because that is one of the best growth areas in this business.  I would recommend you gain experience in selling life because it pays the most, health since that's a pretty steady flow of income, and other home-related insurance policies.  And of course keep honing your sales skill on other P&C insurance products. This way, as you move up, gain experience, and build your client base, you will be able to service your clients in a variety of fields and needs.

      And lastly, if I've made a bad assumption, and you're actually into writing commercial policies, I would recommend you keep that up since that is where the big money is at.

      Good luck with your career, and hope you open up your own agency one day!

    • illminatus profile image

      illminatus 8 years ago from Chicago, IL

      how2start very informative. I'm in the E&S market. Great Job

    • profile image

      Jawad UK 8 years ago

      I was really looking for this information and atlast got your link from google. Really thankfull.

    • livelovecoffee profile image

      livelovecoffee 8 years ago from Georgia

      You have covered all the basics here! great article!

    • profile image

      BFMOSS 8 years ago

      Not many people will share this information, especially in the business world.It's people like you that are unselfish and that are generous enough to share the knowledge through experience lessons.Thank You so much for giving back.This is priceless!!

    • profile image

      Erick Smart 8 years ago

      Great hub! I think as more people are losing their jobs and less jobs are available to those who want them people will need to consider making their own. Maybe not insurance but something else they are interested in that is a needed service. Your hub only gives everyone the idea that if you want to do it and work to make it happen it can.

    • Kubrat profile image

      Kubrat 8 years ago

      Great article. I realy think this is an example of how HubPages will get to the level of usefulness of something like wikipedia. Wikipedia has a more strict format and one topic can be covered only one way - well, in an evolving manner and with collaboration of multiple wise people, but it will still be one article, one way of doing things. HubPages on the other side while having a much more free format - really none of the participants directly influence the text of one's hub - can deliver the richness and variety of personal experience and personal prospective. Still the best can float up and be more visible.

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      Mark24 8 years ago

      Thank you for writing this, hats off to you!

    • profile image

      Alaina G 8 years ago


      I am in the process of starting my agency in Missouri. I came across a company called Online Insurance Corporation that will help you get appointed with the big boys. They offer a quoting tool that will compare all of the rates from the top insurance companies like Blue Cross, UHC, Coventry, and Assurant. It is an awesome software that is the cheapest I have found. If you want to contact the guy I talked to his name is Mitch his email is

      Good luck to all!


      Midwest Health Agents

    • profile image

      Mike 8 years ago

      This is a great blog hands down. I have been selling auto insurance for 9 years now and have always wanted to venture out on my own but taking that risk has always been a huge factor. Do you know exactly what the start up costs would be including an example of a place to rent, advertising, etc.? Just a ball park as I know it obviously varies by where you live at.

      One great thing is that I do know I can get multiple appointments with all of the carriers out there as I have been dealing with them for such a long time and have established great relationships with the marketing reps and have always given them a tremendous amount of business when asked upon to perform the task. I am very familiar with FSC & bridging so once I get started, it will be cake for me to do the behind the scenes operation.

      Like I stated earlier anything with a rough idea of what it would cost to get an agency set up as I do live in CA as well. I just need to know how much it would be for start up costs, including rent, computer equip, the whole works.

      Thank You so Much for any advice and once again thank you for posting such a great blog.

    • how2start profile image

      how2start 8 years ago from Orange County, CA

      Hi Mike,

      Thanks for your comment!

      With regards to the start up costs, here's what you can expect based on my experience.  Assuming you already have both insurance licenses, these are the costs of what you may find.

      Rent: $850-$2000 a month > Depending on size and location

      Security Deposit: $850-$4000 > Usually 1-2 months worth of rent

      E&O Insurance: $2500-$3500 a year, usually paid in full or semi-annual

      FSC Start Up: $600 > Roughly as I remember includes setup and 1st month

      Computer: $500-$2000 each, depends on how many you are going to get

      Legal and Accounting: $1000~$3000MVR and DMV fees: $500 Rough Estimate

      Other Misc: $3000 > Something I missed out on and office furniture/supplies

      Total: $9800~

      This is a rough estimate on how much you need to get the barebones of your operations going.  Usually, the most expensive charge is the marketing expense.  The budget above ignores marketing expenses. So unless you have a good marketing plan or have established relationships with your clients, expect to spend a lot here.

      But the barebone operation doesn't cost very much to start.  I think you can even shoot for $5000 in start up costs as long as you keep everything in budget and don't spend too much on little things.  Also, a lot of agents work out of their homes, so you maybe able to save some money by trying out that route.

      Wish you the best venturing out on your own!

    • how2start profile image

      how2start 8 years ago from Orange County, CA

      By the way, I would recommend this Hub that I wrote as you start out your own business.  About the importance of marketing in a small business.

      Good luck!

    • profile image

      Mir miso 8 years ago

      Excellent, i really mean excellent site.

    • profile image

      Mike 8 years ago

      Thank you very much for your solid input. You have more than helped out and this gives me an idea at least of what I have to look forward to. I most appreciate your advice and comments. You have provided a great service.

      Best of luck to you in what you do and I hope all goes great for me as well.

      I know advertising is what will be the most expensive cost to get ad placement in the phonebook, etc. I am hoping that with me hitting the streets and getting the name out there that it will at least generate some great referrals and with solid marketing to dealers, etc.

      Thanks again!!!!

    • how2start profile image

      how2start 8 years ago from Orange County, CA


      Thanks for your kind words!

      Hope you kick some butt in this tough economic atmosphere!

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      Matt 8 years ago

      My wife has been in the insurance biz for nearly 20 years and a licensed agent for over 15. She is over used and under appreciated in small agency which was handed from father to son and is now in the process of being passed down to his son. My wife is the only agent who does not have a non-compete clause with this agency and does/handles more than 75% of their business.

      The owner is married to one of his prior agents (whom which he left his wife for 12 years ago) and they are in constant conflict as to how the agency should be run. After 9 years at this agency I have suggested to my wife that she open her own agency. We live rurally in a non-zoned area and I have suggested using our house as the agency. The house is huge and can be used in a multi-functional capacity.

      She is simply intimidated by the challenge, but she is a phenomenal sales person and is exceptional at establishing loyal customers. I just came across your site and I am impressed at the information that you offer, but what words of encouragement would you give a $200K+ capabable agent in taking the leap into agency ownership?

      Thanks, Matt

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      Courtney 8 years ago

      Wow, this was the first site that actually had wonderful tips and detailed guidelines to start an independent agency. Thanks so much for the information. Even though I am in the state of South Carolina, this guide was of great use. I'm already licensed, but need to move further. Thanks again :-)

    • how2start profile image

      how2start 8 years ago from Orange County, CA

      Hi Matt,

      Thank you for your comment.

      Your wife does sound very capable, and sounds like a good time to start doing things on your own.

      With regards to words of encouragement, I do really think the decision is up to her.  Some people are just more comfortable working under somebody than going about their own way.  It's really a mindset thing since if she does go out on her own, all the decisions and responsibility will be hers.  And some may just not be as comfortable with that position.

      Given said that, you do seem to be in a great place to start your own agency.  The house and great talent are couple of great reasons to seek for better rewards by establishing your own agency.  

      I may recommend books like "Life Entrepreneurs" by Christopher Gergen/Gregg Vanourek, to get your wife more motivated and encouraged about going off on her own.  I also posted my own Hub on whether you are an entrepreneur or not, so maybe you can take a look at it.

      Regardless, good luck going forward.  My personal experiences is that owning an agency isn't as difficult as it sounds.  You just have to be ready to be a marketer in order to be successful. (Also there's a lot of paperwork.)

      Good luck!

    • how2start profile image

      how2start 8 years ago from Orange County, CA

      Thank you Courtney!

      I'm glad to hear that it was helpful in Sout Carolina as well.

    • britneydavidson profile image

      britneydavidson 8 years ago from united kingdom

      really great hub... this is amazing i dint know this is like this...great idea....i will surely share this with my friends.

    • profile image

      Cellularwebdesigner 8 years ago

      Great article and very resourceful.

    • profile image

      link building strategies 8 years ago

      Very well written article and very resourceful. Keep us the great work.

    • mirons1 profile image

      mirons1 8 years ago

      Great Hub! This might help other insurance agents just starting out: check out:

    • profile image

      commercial broker 8 years ago

      Thanks for the info. This has been the only good information I've been able to find online. I'm a 5 year commercial broker for one of the biggest brokers in the world and am looking into starting my own agency (non-commercial). Have my P&C and LA&H licenses. It's not so fun working for the big corporate companies (but glad to be working). I'm trying to find more details on what it's like to be an exclusive agent of one of the well known insurance companies, as opposed to starting my own agency. It's hard to research what insurer would be the most competitive for certain clients. I would like to focus on Home/Auto coverages. Specifically, homeowners associations since the premium can be much higher for 50 or so units. If you're an exclusive agent, can I as the agent influence what the premium is going to be? What relationship does the agent have with the underwriter(s)? Also, do you know if an exclusive agent of one company can take business from another agent of the same company? Input from anyone would be helpful. Thanks

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      teleassistência 8 years ago

      Nice information... Despite recession I don't hear much problems coming from insurance business... Maybe this is a very good idea!

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      Neil  8 years ago

      You don't mention anything about developing other agents. Can someone describe the process of getting a group of, say, 5 agents contracted "through you" to carriers to earn overrides on their business? What is involved? How lucrative are overrides? WHat lines of ins. pay what override %? Does anyone know?

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      Tshuaj 8 years ago

      Hi, my thing is how can you talk to a company that would believe you to work with you? Which company is the best way of getting to contact or work with in the start?

    • profile image

      Lilian52 8 years ago

      seems an interesting with a lot of information

    • Mr Nice profile image

      Mr Nice 8 years ago from North America

      Very interesting and very well research I will wait until AIG is gone.

    • bill yon profile image

      bill yon 8 years ago from sourcewall

      thanks for sharing your knowledge.

    • profile image

      jayhill1982 8 years ago

      Its a very Informative Hub.............Interesting!

      I am also planning to startup an office....

      May be this website also be helpful for anyone

    • profile image 8 years ago

      good info we are on our way! i have read your blog,and so far so good,thanks in venice fla

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      Mrusa-money 8 years ago

      I am so greatful to hub for this useful infor, I will share it with friends. I is very detailed and supportive.

      I am brand new P&C and got Life and Health, I dont' know where to start, any advice would be appreciated, I want to market full lines of product in multi-state and can be able to cross sell, please tell me any option it good for me, thanh you in advance

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      kenny 8 years ago

      hey selma if i were you i would learn how to spell before you ask your boss for a commission payout. I think you mispelled at least 20 words and that is not good. anyways great article and one of the best on the web. i currently work for state farm and im one of the top producers and i will tell you that they love to sell life but the commission is horrible compared to other companies.

    • profile image

      wendy 8 years ago

      what great info!! i would love to start my own agency...just scared!! i have been doing insurance for 20 years...can you start this out of your home until things get rolling?

    • profile image

      kelly 8 years ago

      i have an opportunity now to buy an agency. but i am not sure the asking price is fair, how do you know what is fair and what is not

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      Yamei Wu 8 years ago

      Hi, I am a female come from China by myself to get my master degree in Risk Management. It's a bad time to find a good job in a big financial company right now. But luck for me, I find my new way. I did as a broker for an independent broker agency last summer. And right now, I am doing as an underwriter for an indepent underwriter angency. Ah, still a lot of things to learn! And it's really a good business to earn money in US! After I enter this business for three months, I had already known that it's good to open agency by myself in the future. Since I am doing all kinds of insurance. My goal is to own my agency in 2 years. Just want to know, is it too early to have an own agency with just 2-year experience? Thank you very much for the information here! And hope everybody here can really have a good future!

    • profile image

      Yamei Wu 8 years ago

      Hi, I am a female come from China by myself to get my master degree in Risk Management. It's a bad time to find a good job in a big financial company right now. But luck for me, I find my new way. I did as a broker for an independent broker agency last summer. And right now, I am doing as an underwriter for an indepent underwriter angency. Ah, still a lot of things to learn! And it's really a good business to earn money in US! After I enter this business for three months, I had already known that it's good to open agency by myself in the future. Since I am doing all kinds of insurance. My goal is to own my agency in 2 years. Just want to know, is it too early to have an own agency with just 2-year experience? Thank you very much for the information here! And hope everybody here can really have a good future!

    • how2start profile image

      how2start 8 years ago from Orange County, CA

      Hello Yamei,

      Thanks for your comment.

      Since I started my agency without any experience in the industry, I think 2 years should be good in respect to experience.

      However, starting your own agency will mean much different skill sets compared to being an underwriter.  You'll need a lot more sales, marketing, and customer service skill, and if your training is in Risk Management, it might be better off trying to find a nice paying job at a big company.

      That being said, owning your own company is the best way to create wealth in this country. Especially, with the growing Chinese population in the US, it is probably a very good market selling all types of insurance to them.

      You might want to check out my article on Are you an Entrepreneur to see if you have what it takes to start your own business.

      Good luck to you and your bright future ahead.

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      JOSE R 8 years ago

      i have some questions. im licenced for p&c / life/ health and working for a broker the money is not bad but im looking into the possibility of having my own agency. i have almost 3 years experience and i think its about time. but im conserned about the price . would you think that $ 20,000 its enoght also what would a good goal as far as numbers like how many sales a week and also would you consider a parnership a good idea or should i do it my own ? i have a lot of questions a can go for days but so far for now ill appresiate if you replay thank you for all the info i really appresiate it

      Jose R

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      Nestor 8 years ago

      Good information.


      I am a new agent and having difficulties in getting into the industry, any recommendation.

      Also how can I get with a broker in Florida were I live.


    • how2start profile image

      how2start 8 years ago from Orange County, CA


      I think there aren't that many problems if you start your operation at home. I think many do it that way with a lot of success. I've recently read an article on the WSJ saying that even larger consulting companies are reducing office space, and keeping employees at home. You can start at home, and once it becomes too distracting, maybe you can get a small office, or sub-lease it with others. There are even temporary office spaces that you can rent to meet clients, and go to it few days a month for a small monthly fee.

      Of course, having an office does help you to not procrastinate as much. Being home, you do need to deal with all of the distractions you got inside your home, and that can be hard at times.

      But in these economic times, working out of home, and investing the savings into a good website is probably a better way to go if you have the discipline.

      Good luck!

    • how2start profile image

      how2start 8 years ago from Orange County, CA

      Hi Jose,

      $20,000 is sufficient to start out your insurance business. Just work smart, and avoid big item costs like rent, payroll, and smart marketing so that you don't burn through your cash.

      If you play the game right, $20,000 should be a nice amount of start up money.

      With regards to partnerships, I would try to avoid it if you can. When you have a partnership, you do need to split the income 50-50 or at least some percentage. Sometimes if you have a good partner, things will work out. However, in most cases, partnerships do crumble a lot. So you should consider starting out most of it on your own, and hire someone rather than get a partner.

      In terms of sales, that's really up to you. Calculate your fixed costs of running the business, and how much you need to live. That should get you your initial sales goals, since that's what you need to survive.

      Not sure if this helped, but best wishes with your new agency!

    • how2start profile image

      how2start 8 years ago from Orange County, CA

      Hi Nestor,

      I'm not exactly sure how bad the recruiting environment is, but maybe you can start out selling life insurance.

      They usually work based on commission only basis, so if you're a decent person, they are usually hiring good agents all the time.

      Great firms like New York Life, and Met Life are some good options you have. They have a great training program to get you going as long as they like you.

      Good luck!!

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      Rhonda Robertson 7 years ago

      This is an awesome blog...I wish I had it when I started out. Now I am trying to get out of the insurance business and not because the business isn't good but because I am moving forward in my passion of Social Work. I am located in Houston, TX (southeast) and have an established Personal Lines clientel of 380 active customers. The location has been there for 12 years and is in need of someone who can write more than auto insurance. Please e-mail if you are interested in more information

    • profile image

      EricD 7 years ago

      Wow! I am very impressed with all of the info you have provided.

      THANK YOU!

    • profile image

      LisaL 7 years ago

      Thank you for the great information. It is generous and very much appreicated.

      I've been in the insurance industry for 10 years and started as an independent contractor with one company that has a niche market. I've slowly been adding other products and providers to my portfolio. I think I am ready to make the leap to my own agency.

      Despite my tenure I find myself asking lots of questions and moving very slowly as to not make mistakes. Are there any mentoring recommendations you have? I feel that a mentor would help me tremendously.

      My situation follows:

      I have an opportunity working with a large group of around 3,000 employees. The insurance provider (Company A),which I am most fimiliar, does not offer the product needed at this time. I mentioned the possibility to another broker who found a product that would be a good fit through a competing company (Company B). I have a plethora of questions.

      What is fair compensation if this broker and I work together on this account? I feel I can do the majority of the work load without help but want to compensate him fairly for finding the product. I think 70/30 is fair and he thinks 60/40 is fair. If I had already been on my own this wouldn't even be a discussion. I do have to give him credit for finding the product. Also, I do not have a direct relationship with Company B which makes me extremely uncomfortable. I do not want to lose control of the account nor do I want to make a huge mistake. This could be the largest account of my career.

      I'd like to go to Company B directly and establish my own relationship since I'm starting my own agency. The broker I'm working with will get an over-ride on me in addition to his percentage for this first account we work together. I am relying completely on this broker to be contracted with Company B. He insists that the account will be mine but what actions can I take to insure this is true? I'm not his employee. We are merely aquaintences. I have no idea what a contract should even look like to protect myself.

      My alternative would be to direct the prospect to the products I am most fimiliar with through Company A which are great products, but in my heart of hearts I think the Company B's product is a better fit right now. Company A may have a product by the beginning of next year or so.

      Lastly, I'd love advice on the non-compete. I'd use Company A if they offered the product. My non-compete states I can not replace biz established. If the product doesn't exist and the account is not established as Company A's account then I think I'm safe. Yes, I realize, an attorney may be in my near future. Thus if you have any mentors you think could help I would be forever in your debt.

      Any words of advice?

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      Serge 7 years ago

      Nice, very useful blog. I am glad that found it. Thank you.

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      nk 7 years ago

      Great Information, I am in the insurance n business for over 10 years. I have both life and P&C licenses and I am thinking to open my agency. Should I go ahead and open one of these(Farmer, Allstate, or Statfarm) agency or start my own independent company.

      Thank you.

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      David 7 years ago

      I just got my Fire and casualty licenses. I have no experience. I tried to become an agent with Farmers but my credit got in the way. Too many collections. Does every major company makes a big issue about the credit?

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      TL 7 years ago

      I just started out in P&C insurance,does anyone have ideas on obtaining E&O insurance for my agency?

      Thanks for the help.

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      j dizzle 7 years ago

      Ive had my p&C license for about 6 months, opened my own agency, currently i do commercial, proffessional,business, workers comp, and auto commercial, I would like to start selling mal-practice. I do have a few producers working for me and im lucky things are going good. what companies would you recommend.

    • profile image

      j dizzle 7 years ago

      Ive had my p&C license for about 6 months, opened my own agency, currently i do commercial, proffessional,business, workers comp, and auto commercial, I would like to start selling mal-practice. I do have a few producers working for me and im lucky things are going good. what companies would you recommend.

    • profile image

      B Ho 7 years ago

      Excellent. I will revisit this site.

    • profile image

      B Ho 7 years ago

      Excellent. I will revisit this site.

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      Fred Costa 7 years ago

      I am taking my license (Casualty & Property) test in couple weeks after fininshing my training class. I have worked in Banking for the last 4 years, and I have build a very strong book of business of Personal, Business & Commercial clients in Florida (Mostly Latin American) also one of my business partners is a CPA that will give me all of her book of business which are over 7500 costumers (majority Latin Americans) therefore we have all the sell side covered, my questions to you would be: Does the fact that I have a guarantee book of business helps me to get appointed with a Insurance Company? And if it does, how should I present this to them? And what company should I try to start with?

      I appreciate all this information it has been very helpful.

      Thank you

      Fred Costa

    • TnFlash profile image

      TnFlash 7 years ago from Tampa, Florida

      Excellent Hub! This is good information on starting your own business. With jobs being scarce, it cold be a viable option for some people.

    • profile image

      flair72 7 years ago

      great hub... as an insurance broker, how do you keep track and pay your sales agents?

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      shadowsdad 7 years ago

      It's always great to find an article that is written from the perspective of the client AND the business owner. That way, the reader knows that the contributer understands both being a customer and is now providing service from your own company. "Been there, done that."

      Your information about commission rates for various insurance options is extremely valuable for future owners of insurance agencies. And your six steps are explained very well for anyone interested in owning an insurance agency. I'm glad that you point out that your perspective is in California so the reader knows to adjust if they are in other states.

      Thank you for your contribution.

    • profile image

      shadowsdad 7 years ago

      It's always great to find an article that is written from the perspective of the client AND the business owner. That way, the reader knows that the contributer understands both being a customer and is now providing service from your own company. "Been there, done that."

      Your information about commission rates for various insurance options is extremely valuable for future owners of insurance agencies. And your six steps are explained very well for anyone interested in owning an insurance agency. I'm glad that you point out that your perspective is in California so the reader knows to adjust if they are in other states.

      Thank you for your contribution.

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      BizmanIndiana 7 years ago

      Nice article. I've been a Personal Lines Underwriting Manager for many years and now have taken the jump as an agent.

      I did want to clarify a misstatement in the original article. Step 5 under Loss Ratios stated that break even was 100%. That is not true. Break even is different line by line and company to comnpany. Break even for autos can be 75%, because MVRs, loss reports, salaries, light, heat, etc, need to be added into the cost of doing business.

      If your loss ratio as an agent is 95% for a number of years, you might think you are making money for the insurer. But if the break even is 75%, you could see your appointment quickly vanish.

    • profile image

      Toni 7 years ago

      This is the best site on the web in regards to starting an insurance business. Really! I wished I had found this site over a year ago as it took me 4 months to research and gather everything you discussed here. To come to one site and find it all would have been icing on the cake and I have to applaud you for doing with so many refuse to do as if they fear someone will take their customers. I've been in real estate sales since 2002, worked as an insurance adjuster for 2 years and then decided to open my open insurance company and obtained my P & C license a year and a half ago. It was a headache trying to get answers and many sites would try to discourage you without giving you anything helpful. I want to thank you for helping those who have and will come to this site with questions like I had. This is truly a treat for them.

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      Roxy 7 years ago

      Thank you so much, this is the best step by step information I have seen so far. I have a P&C and Life (in FL) I have a passion for this business and I do enjoy it. After reading this article I am more enthused about starting my own agency. Does anybody have any specific information about south Florida? are there any support groups or mentor groups that I can join? thanks

    • profile image

      jd 7 years ago

      Do you have any idea if I can use the word "agency" in my company name if I am not a licensed business entity..rather a producer with a DBA with the company name under a differently named LLC? No one can answer this question for me. thanks!

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      Michael 7 years ago

      For some reason there are so many Colony Insurance on google. Do you know the web address or phone number for COlony Insurance, I have had my life/health agent license for over 5 years but just received my P&C license last week and it is almost impossible to find someone that will give an E&O coverage for this field...thanks in advance..

    • profile image

      nick 7 years ago

      hey how2start....

      first of all, thank you for sharing this information. recently i have considered starting an insurance agency in my home town, and your hub makes everything alot easier.

      the question i have for you is very simple. i was wondering if anybody can be an insurance writer? i mean as an agency, you are pretty much selling insurance from different companies. if i have my own insurance agency, can i sell my own insurance, rather then sell an other company's policy? i hope you can reply to this. thank you very much.


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      sam 7 years ago

      Any Good MGAs for commercial?

    • profile image

      Gina 7 years ago

      Great information. Thank you so much.

    • profile image

      abdul qayum 7 years ago

      Good guide to start from

    • profile image

      Jayant 7 years ago

      superb !!

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      kpcalifornia 7 years ago

      This is a great post! I have been looking for a site like this! I have wanted to start up as an independent agent for a while and this is perfect. I am in California too!

      Since you are THE person to ask on this, if I only want to offer life, disability and LTC, do I need a surety bond? Also do I have to be affiliated with a general agency? Can I be appointed to various companies by a wholesaler and still be considered independent? Would that be advisable? Thank you!!!

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      CarlieKathleen 7 years ago

      USLI (United States Liability) offers THE best rates for E&O Insurance... It is approx $2,000 per year for P&C, Life and Health. Go through a General Agent - Med James is great and they pay 11% commissions if you quote it yourself online.

      Colony is WAY too expensive!!!

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      CarlieKathleen 7 years ago

      Oh, and in order to start your own agency, the majority of the carriers, at least in the state of Arizona, REQUIRE that you have a retail, storefront location before they will offer you an appointment. They aren't looking to work with people in the footie-jammies. :)

      And, one last thing - If you EVER plan on being a reputable company with let's say a minimum of $1,000,000 in P&C premiums, you need to have a decent Agency Management System to keep track of your clients, policies, etc. I HIGHLY recommend AMS Services by Vertafore. This system is expensive ($2000-5000 down and $250-500 a month), but is ENTIRELY worth EVERY penny! They keep track of your accounting, download policy changes/cancellations/etc. directly into your system, manage your sales flow, agency net worth, vendors, carriers, customers and anything else you could ever think of....

      I know from experience.... If I had a chance to do it all over again, I would!

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      ycy 7 years ago

      yeah yo

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      John 7 years ago

      I would also recommend that you attend the yearly fall Palm Springs, CA convention(Sept 23-26,2010)of The Alliance of Insurance Agents & Brokers which is the largest convention on the west coast. You will learn more there in a few days than you could the rest of the year about getting your business going from people just like you who have donne it themselves. The markets are all there for you.

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      MOHAMMED  7 years ago

      Great information for new or inexperience agents in the insurance business, who have the entrepreneur spirit of starting out their own agency.

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      nyomi 7 years ago

      Hi does anyone know of any other MGA's similar to insurance noodle to offer more variety in california I would like to start with 2-3 MGA's to have access to over 50 carriers to start?

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      Ulises 6 years ago

      Thank you for your post! It's very good and informative!

      I only have one question for you. Is there a reason why you got out of the Insurance biz? I'm sure you probably moved onto bigger and better things but I was just curious because I'm starting my business. I want to make sure it's worth it.

      Thanks in advance!

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      insdoc91 6 years ago

      I'm a captive agent (used to be indpendent) who's moved to a smaller town not knowing many people. What's the best way to market and how much $ will I need for marketing? We offer auto, home and life.


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      Nadeem 6 years ago


      I was sleeping and when got up I hve an idea that I should form an insurance company .I never thought before abt it and I had no idea at all .with my start I write how to open insurance business and strightaway I read this was really impressive and full of guidence especially for beginers like and I think it is informative for working people.

      In the end thanks mate it's really nice piece of work.

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      Mario 6 years ago

      I was wondering since I'm currently an exclusive agent at a large insurance company, what would I need to do if were to leave, in regards to show I have an appointment? Would I need to get an appointment with a new company or could I just state that I'm starting my own? If I remember correctly, if I cancel my current appointment my license becomes inactive until I get another appointment. So would that stand as an obsticle for uptaining a new appointment? just curious about it, since it wasn't mentioned in your hub.

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      adriana 6 years ago

      excellent article

      i'm not in the industry but is so well written that I understood every step of the process.

      interesting and clarified some details i was looking for.

      thank you

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      Carlos 6 years ago

      I am new to P&C in fact will be taking me test in AZ in two weeks. I have a friend that has 8 auto body shops in Phoenix that needs to be insured but wanted to find a person to refer it too that would not take all the $$$ ... Also I would like to be able to do Home and Auto but figure out a company that i can keep the trails. I have the marketing down to generate the leads just want to make sure I pick the correct way to get start.. im thinking about the Broker option to start..

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      roycheong1031 6 years ago

      Hi! Great info. here! Thanks to How2start!

      I have been in retail ins. agency for few year and now are just start to work on one of the retail ins. agency; I will handle their Personal line only first. They came up with an initial offer that for all new business I will get 3% from it first...Am I being rip off? or this is usually the case to start with? Need advice and comment. Thanks!

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      abe 6 years ago

      Hi, I am in te state of GA. I currently work for a small agency and am thinking about starting my own. Do I have to be an agent or be sponsored to get my agent's license?

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      bella 6 years ago

      I worked for a Broker doing auto, home & commercial policies for 4yrs...i worked very closely with him during a daily basis in all aspects of the office..this is the most detailed and accurate info i have read..i am also in the process of getting my brokers license with the hope of having my own office upon passing the exam..

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      Matt 6 years ago

      THANK YOU!!! This information was very useful and I can't wait to open up my own agency, I got my P&C license. I used to own a fast food business but I needed a business that was more challenging and on going with education and positions and insurance was it. I am 28 years old, live in south jersey and have a place in mind for my agency but I want to partner up with someone that has a little more experience than I do. If anyone is interested please E-mail me and we can discuss our plans for start up, ( mattabdali@YAHOO.COM ) THANK YOU,

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      Judy 6 years ago

      Can I own an insurance company without an insurance license if I have licensed agents working for me?

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      arman martikian 6 years ago

      Thank You so much. All this information for free.

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      George Fods 6 years ago

      I like the technical aspect of the article. I am currently a captive agent working for a major insurance company. Looking to possibly starting my own company. When you are a captive agent, there is a lot of business that leaves your doors because of price. No matter how much you sugar coat the coverage, in this hyper competative market the price will always win. So having your own company and being able to offer a variety of different prices, helps you keep the client.

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      Harry 6 years ago

      Very helpful.

      In CA, cany start an insurance agency out of your home or do you need an actual office space ?


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      Jvilla 6 years ago

      Great and easy to ready article!

      Like many agents out there, I'd love the idea to star my own business. I am licensed in P&C and L&H since 2003, I have been working for a broker strickly comission base split 70/30. I am afraid to take the risk to be honest because it is very hard to start all over again if you have a family. a word of encouragement from my clients sometimes motivates me but I still undecided to take my first step in this difficult business. Help!

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      KilmaF 6 years ago

      Thank you so much! I also found your article very interesting & helpful. I am going to be taking my P&C exam in a couple of weeks after I take my course. I have been in the ins biz for 4 yrs now as a CSR for an independent agency in South FL. My plan is to continue in the coming year in the agency, as I am hoping for a promotion as manager in January, b/c the current one is pursuing a different career path. I have a couple of questions:

      1) What is the average salary that an insurane office manager/agent should receive?

      2) The 10k amount that you mentioned as the average starting off amount, is that for the whole year?

      3) I believe that the loss ratio here in S FL is horrible, but then again, the premiums are always high. I want to sell ins, but then again, I don't want to pick uop the phone & hear about a hit & run or accident that a client was involved. Is Ca compared to here regarding, bad drivers?!? I don't know if I should move.

      Again, I want to echo the positive responses that everyone has posted on here about your article. Great job!!!

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      Luis 6 years ago

      Just wanted to thank you for your hub it was very helpful, like you i too haven't had any experience in the field of insurance. i just got my license(property&casualty) in NY state and now going for my life & heath insurance. I am thinking of opening my own agency but thought i should maybe work for a company to get some experience. Do you think it would be easier to get the experience first or should i just try going off on my own?

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      Jessica 6 years ago

      Very useful information thank you!!! I have the same questions that was posted a few months ago by NK. My husband and I are debating on whether we should open an independent agency or open an Allstate or StateFarm.

      If you could be of any assistance it would be greatly appreciated.

      Thanks again!!!

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      Stephen Wray 6 years ago

      Thank you very much for having taken the time to write this page up for those of use looking to improve ourselves. As I continued to read your page I wrote down some questions in regards to Step 5: Getting Appointed with Insurance Companies My first question is: How can I get Appointed with insurance companies if It’s my first time in this type of business p.s. I have a very successful Tax Company, and when I do get appointed will I only be able to offer that insurance or will I be allowed to sell other insurance with companies I am not yet appointed with?

      Should I first get appointed with as many insurance companies as possible and then purchase the FSC Rater software?

      Any more information in regards to step 5 would really help me,

      Once Again thank you very much.

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      view360NOW 6 years ago

      Thank you very much for having taken the time to write this page up for those of use looking to improve ourselves. As I continued to read your page I wrote down some questions in regards to Step 5: Getting Appointed with Insurance Companies My first question is: How can I get Appointed with insurance companies if It’s my first time in this type of business p.s. I have a very successful Tax Company, and when I do get appointed will I only be able to offer that insurance or will I be allowed to sell other insurance with companies I am not yet appointed with?

      Should I first get appointed with as many insurance companies as possible and then purchase the FSC Rater software?

      Any more information in regards to step 5 would really help me,

      Once Again thank you very much.

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      ChildofGod/Indiana 6 years ago

      Thank you very much! Very informative.

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      Lina 6 years ago

      if you are not sure about been an exclusive agent or not then just go with a MGA, start writing your business plan to present it.

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      Sunshine 6 years ago

      Very informative for start ups.

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      Mick 6 years ago

      While the article is well written, it is geared to starting your own business as a broker, not an agency. What is clearly missing is the very difficult challenge of obtaining an AGA contract from an MGA in order to attract your OWN agents. It would do you no good to have a producer contract. MGAs don't readily give out AGA contracts, and they only give them out to highly experienced brokers due to liability and retention issues.

      And even if you did get an AGA, you still need to recruit agents to work for you! Your AGA contract bonus will ALWAYS be less than the MGAs, so why should an agent work for you and not directly with an MGA? You will have to pay them less and offer them a perk or two. Even so, you will probably only be attracting new people in the business, so you are back to square one in terms of spending all your time training them to get a very small override bonus.

      Sometimes it's just not worth it unless you have 50-100 agents working for you.

      I'm not trying to discourage anyone. Being a PRODUCER can be highly rewarding, IF you are writing all the business. Being the owner of an AGENCY is a completely different thing. I am just sharing the facts.

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      SB 6 years ago

      Thanks for your article. It was well written and very informative.

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      Ty Lim 6 years ago

      Great article. Informative, accurate, easy to read and understand. I am in process of starting my insurance brokerage (selling Life and Annuity).

      Also liked your article on marketing. Ablolutely true. Marketing and Sales are key to success.

      Thanks for your contribution.

      You seem like a really nice and authenthic business man, the kind I respect. Feel free to reach out to me if I can support you in anyway. Here is my linkedin link:

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      Ty Lim 6 years ago

      I see that you are a serial entrepreneur. As for making your first million, what is your thought about FOCUS (Follow ONE Course Until Successful)?

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      Jason 6 years ago

      Great article! It was really well written and informative.

      Just to clarify one thing -- you mention comparing rates 'like' I just wanted to point out that Progressive uses publicly-available information to estimate what they think each user's quote with another company would be. It's only an estimate and isn't always helpful (they quoted me "$800 to $4,800/year" with State Farm).

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      Jacqueline 6 years ago

      Does anyone have any recommendations between PIA (Professional Insurance Agency) based out of China, or PIIB (Pacific Interstate Insurance Brokers) which is local to California as clusters/networks for an independent agent?

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      Tony Tong 6 years ago

      Very practical and informative

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      Sara Arjmand  6 years ago

      Thanks so much for posting such a useful article! Well written and very informative!

      Appreciate your time and effort

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      Mencia 6 years ago

      Great information. Very detailed, informative, and useful. The steps are easy to follow making getting

      started a possibility. Now I can see having my own agency as a reality, no longer a dream. Thanks!!!

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      Mark 6 years ago

      Can you please share best companies to be appointed with in California? Both personal & Commercial lines please. Thank you so much!

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      Paul Chan 5 years ago

      It is great help. Good work. My question is. I just passed PC exam in CA and would like to sell Surety Bond.

      I do have underwriting skills because I used to work for Surety Company. In this case, do I still need E & O insurance for my own agency? and any suggests to me to be surety bond agent?

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      c21neal 5 years ago

      Looking to open a coastal agency in NC, does anyone have any recommendation for independent writers, like Smart Choice , who is their competitor

    • profile image

      Ibrahim 5 years ago


      starting your own agency can be stressful but there ARE easier way to do it. contact me for some first hand advice.

    • profile image

      mymoneylink 5 years ago

      Thank you for the great info.

    • profile image

      HODGENS 5 years ago


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      DEE 5 years ago


      THANK YOU....

    • profile image

      john 5 years ago


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      Joshua Nichols 5 years ago

      While I do not disagree with anything said I would like to add that this industry is a lot harder to tackle than one may think. As owner of a successful insurance agency I will tell you it has not always been fun. On top of getting a Insurance License and maintaining it through required continuing education classes. You have to get appointed with a insurance carrier. This means they allow you to sell their products. Most are different on their requirements but all require personal credit checks and background investigations and separate training for you to become appointed. Some require you have a office outside of your home and have proof of funds so your not considered a "shell" company. Malpractice insurance "E&O" is required and most set limits that must be met. If your considering starting an agency I would suggest you don't venture into it hastily work for a local insurance agency and learn to prospect for customers and ensure this is what you want. Insurance is highly regulated and your state insurance commissioner will audit you and your carriers will preform cut backs on amount of agents they have appointed. You then need to figure out what your going to do for your clients. If your agency fails you not only hurt yourself but you hurt everyone of your clients. I do not mean to discourage anyone, but this is not a get rich quick industry. It takes years of prospecting and developing to become truly successful. I wish you all success just make sure your aware what your getting into and have a plan to support your family for at least a year as most agents do not make much of a profit their first year regardless of what recruiters may tell you.

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      Very Green 5 years ago

      LOVE THIS HUB!!!

      I'm starting my own agency and like you, I have no insurance experience. I've lived in the same town for 40 years and worked in local media since I was 16. Luckily, I have great relationships in my state. From business owners to politicians to towns people. My business partner is in a similar situation. Very well liked and well know. We both also have sales experience. To say I'm nervous is an understatement. At the same time, excited for the future. Do you think these are things we should use to sell ourselves to the companies we plan to rep? We have a few other local owners that we are friendly with who have been mentoring us. Do we use them to help us with Errors and ommissions coverage? We both have solid business experience handling multi-million dollar budgets. This is a whole new world though. We both passed our exams and received state licenses. Thanks again!

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      Holli Wilson-Louie 5 years ago

      Great Hub...I have been in the insurance industry for the past 32 years. I started out as a captive agent and had an agency for 4 yrs. I was young and really had no guidance to open and run my own agency. I hung in there for 4 years. I then decided to go inside and work for other companies as a sales agent for them. The experience was invaluable. I'm grateful that I had the opportunities I had. I was just laid off from my last position and have been thinking about opening up my own agency again. I appreciate all of the information that you provided. I won't be going in blind this time.

      Thanks again.

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      Donovan 5 years ago is the best licensing training in Kansas!

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      Mr. Green 5 years ago

      I think the info in this hub is outstanding. I have been searching for info like this for while. Im band new to the business and I read one person's statement about credit rating. will a bad credit rating stop you from being appointed with ALL insurance companies?

    • profile image

      Latinita 5 years ago

      Thank you so much for taking your time and informing us about the How Tos on starting up an Insurance Business. I have a small capital and have been considering a business like this. This article is very informative. Thank you, thank you, thank you. Just one more thing please, same question as Mr. Green, what role would the personal credit play if any in getting appointed with the insurance companies?

    • profile image

      Andrew Gravel 5 years ago

      I can help anybody in the US get started writing life insurance. I have recruiting agents all over the country so if your interested just find a way to contact me.

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      Susan 5 years ago

      We are starting up our agency . Looking at clusters like PIIB and other options like SIAA . Does anyone have any thoughts on the best way to go and are there any other good clusters like PIIB

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      Mirela Saric 5 years ago


      My Name is Mirela Saric and I am originally from Europe. I came to this country 17 years ago. I have BA degree in Communication but I always loved Insurance because one of my first jobs here was at Farmers Insurance. Right now I am planning to open my own Independent agency. I will sell insurance and also provide other professional services to my community such as help with getting disability benefits, citizenship and many other services because i do have experience and my community needs help in these areas.. This way I am sure I will have many clients in insurance aspect as well because people from my country and countries that surround my country trust me and would come to me for business and they stay with one person for ever as long as they trust the service I provide to them. So I really wanted to thank you from the bottom of my heart for all the info you provided because it is hard to start your own business and it seems that no one wants to share their advice. You are an amazing person and you will succeed even more because you are helping others. I also have helped many people and always tried to do so and that is why my community trusts me. Here is my email so please contact me. I would love to keep in touch and if I have any questions or if maybe I can be of any hep to you please feel free. Thanks again.. Mirela

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      jay 5 years ago

      thank you for sharing your experience. its very helpful

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      curious 5 years ago

      Hi, I am thinking about starting my insurance career with Farmers. Do I get to keep my book of business if later I decide to start my own independent agency? Or will I be able to brokage other insurance carriers besides Farmers?

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      LINDSAY 5 years ago


    • profile image

      AgencyEquity 5 years ago has a number of resources to help those start an Insurance Agency, including our Guide to Starting an Insurance Agency:

      Our Information Request Page:

      Our Cluster an Alliance Directory

      Other Start up Resouces:

    • profile image

      chads 5 years ago

      this has always been an interest to me. you have provided me with some great ideas.

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      Scott 5 years ago

      Thankyou for putting this out there. I am a health and life agent in Florida and am tired of working my butt off to give large percentages away to the broker and so callled "trainers". Everyone wants a piece of the pie. I just wanted to see if I could take my business in my own hands and your hub has given me the information and inspiration I needed. There are about 5 agents waiting to start from scrach with me, so I believe it is time to get the show on the road. thankyou


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      Alex Mekonnen 5 years ago

      Hey, my friend, I read wonderful story with great work experience as well as impressive knowledge, however I have never been insurnce agent before, but now I'm thinkig so pls email me at you..!!

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      rewards 5 years ago

      looking to start an agency from scratch in Houston Tx and am looking to partner with someone to help share the cost. Please contact me if you are interested

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      Christine 5 years ago

      What are the requirements as far as an insurance office, signage, physical address etc. In other words, can you operate from your home or is there a criteria you must follow?

      I'm interested in North Carolina. Thank you,

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      tc 5 years ago

      HI: I am planning to open a insurance agency from scratch in CA. I have all my license. Trying to get a name for th ebusiness plus get Business card and signs. I am not sure if I am suppose to submit any kind of paperwork to DOI for approval? I was told by other agents that we don't need to notify DOI and open office.But reading DOI information, I have to inform DOI my business name ans sure that no one else have the same businss name? That is my confusion. Please advise....

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      Previous State Farm Agent Employee 5 years ago

      Article is very helpful. The only thing that I don't agree with is that working for a big company is the besy thing you can do. Alot of the State Farm an Allstate Agencies that you see are independently owned. Most of the agents don't offer healthinsurance or Retirement Plans.Once you get to office manager there is no growthand you end up reailizing that the ones that are really we off are the people on the other end of the phone-the people that work at the actual company or the corporate office and to get there you have to have minimum a Bachelors

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      Leo 5 years ago

      Your information is helpful. I am trying to start my own independent business and this article is giving me a clear path of the road ahead.

    • profile image

      JACOB 5 years ago


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      Dan 5 years ago

      I was under the impression that you started your own company. This sounds like you sell other peoples insurance and get a commission...

      Im looking to start my own from scratch, like put up the funds and create my own. Was looking into the moving insurance business. Mainly into cargo insurance.

    • profile image

      besik 5 years ago

      Dear Sir,

      I can deliver leased instruments to Organisations or individuals with their

      preferred text verbiage as been approved by their bankers. We also offer

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    • profile image

      KIM 4 years ago

      GREAT, GREAT information on how to start an independent insurance agency. Thank you so much for unselfishly sharing these invaluable ideas to us, who want to start an agency.

      EXCELLENT..............................ANSWERS ALL MY QUESTIONS

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      Ms.Yolanda S 4 years ago

      Planning to do the same, worried about the insurance but hopefully my perserverance is is just as tough, Thanks in advance for the article.. Wish the rest of us luck.

    • profile image

      Reddyred 4 years ago

      I love you for this article thank you so much you have no idea how much this just meant to me. What's your email.

    • profile image

      Jeanette 4 years ago

      Thank you for this very complete and informative outline. I am now much clearer as to what needs to be done in forming the agency that I wanted to put in place. I sincerely appreciate your help. Now I can get started. Thank you sooooo much.

      May God continue to Bless you and yours

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      sheryl1221 4 years ago

      I am working on starting my insurance agency and I am so thankful for this information. I have been an agent for only one year. However, I have this drive to get my own agency. Please I am asking you for your advised on starting my agency. Starting out selling life and health,

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      Samba 4 years ago

      Hi, I'm in CA and I have my Life and Health license. I want to start my own small agency from home because I'm tired of splitting my commission with the agency I work under, I want to be my own General Agent. I need to know if I need my P&C as well just to operate as a Broker? I will be doing mainly life and health.

    • Sean Shock profile image

      Sean Shock 4 years ago from International

      Thanks for the tips, It's a lot of work but at least I know what to work at now.

    • profile image

      Mark 3 years ago

      Thank you for the very detailed and neutral information. I have this dream to work for myself. Even when I think how scary it might be at first I think then of how miserable I am working in my present career. Thank you so much for fueling my dream.

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      Moss 3 years ago

      How do I get my agents temporary license?

    • profile image

      Nor 3 years ago

      Hi, great infos, I really appreciate it.

      I have no experience on this industry but I want start my own insurance agency. What would say to someone like me?

    • profile image

      Peggy's Insurance Service 3 years ago

      You rock. Great Info!

    • profile image

      Vance Meyer 3 years ago

      Do you have a business plan for starting an agency? If so please email it to me at



    • Spencer Wouldhe profile image

      Spencer Wouldhe 10 months ago

      You will definitely need a good Claims Management Software, and Policy Handler. Luckily has you covered. JW Software has been in the insurance industry for over 25 years. FileHandler & PolicyHandler are one of the leading programs trusted across the board.

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