How to Start an Auto Insurance Company
Starting an auto insurance company is a good venture for those who are skilled in sales and customer service. And according to the Bureau of Labor Statistics, the insurance industry is expected to grow 16 percent by 2016. But before launching your auto insurance company, it's important to determine which products you'll offer and secure the necessary licenses to sell insurance in your state. Here's a guide to starting an auto insurance company.
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Instructions
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Get licensed with your state Department of Insurance. The first step in launching your auto insurance company is getting a license to sell insurance. Most states require that you complete an education course before taking the state exam. To check on your state's individual requirements, contact your state Department of Insurance.
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Consider selling Allstate products. Prospective agents need to fill out an application to be accepted into Allstate's agent program. Once accepted, applicants are sent to a training program lasting several weeks. If they successfully pass the training and a rigorous background check, they are permitted to start their own agency under Allstate insurance.
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Check out State Farm Insurance. The first step in opening an auto insurance agency with State Farm is meeting with a company representative. Once they determine you're a good fit to sell their insurance, you can complete an internship within the organization. After completing these steps, State Farm will clear you to open your own auto insurance business selling their products.
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Consider selling Progressive Insurance. To sell Progressive Insurance products through your company, you must be a licensed agent and have a good record. Plus, you must pass Progressive's extensive background check and operate your office in a commercial office (not out of your home).
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Purchase Errors and Omissions Coverage (E&O). When selling insurance you should purchase E&O insurance of at least $300,000. This will protect your from potential lawsuits. Request a list of E&O providers from your state department of insurance.
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Tips & Warnings
Create a marketing plan for your company. When launching your auto insurance company, it's important to generate marketing ideas that will drive business. Make a list of your friends and family and come up with some ideas to save them money on auto insurance. You should also participate in community events to get your name out.
Have a year's worth of living expenses in the bank. You first year of business will be about building clientele and your revenue base. Having a year's worth of expenses will get you through the most difficult time of your business.
