How to Start an Independent Insurance Agency

Insurance agency owners assist clients with a variety of insurance needs including, homeowner's, rental and life insurance policies. They also evaluate each client's situation to select products that will be most cost-effective. But before launching your independent insurance agency, you must apply for licensure with your state and determine which types of policies you want to offer. Here's a guide to starting an independent insurance agency.

Instructions

1. Complete your state's required pre-licensing course. Before approving an application to sell insurance, most states require applicants to complete an insurance pre-licensing course. This course will educate insurance agents on your state's individual laws. Check out your state Department of Insurance for accredited programs in your area.

2. Take your insurance license state exam. After completing your pre-licensing course, you qualify to take the state exam. For testing dates and times, contact your state department of insurance. Since some states offer this test monthly, it's important to schedule your time early (because testing centers may fill up).

3. Complete a business license application. Before offering insurance products, you must have a business license from the city your company will reside in. Complete an application at your city hall business department. Processing takes a couple of weeks and the application fee is about $50 in most areas.

4. Decide what types of insurance policies to offer clients. Operating an independent insurance agency means you can offer products from several different carriers. For example, you can sign up for Progressive Insurance's independent insurance agent program (see Resources), and pick and choose which products to offer. You can also consider other popular carriers, such as Allstate (see Resources).

5. Market your services to potential clients. The first step in marketing insurance products it to make a list of potential leads. This includes friends, family and business acquaintances. Talk with each individual and work out situations that would save them money or expand their insurance coverage for the same price. Also, get creative with marketing efforts. For example, attend local homebuying fairs to talk about finding the right homeowner's insurance polices. Make time for marketing activities every day to quickly grow your business.

Tips & Warnings

• Consider working for an insurance agency before launching your own company. Having established clients makes launching your independent insurance agency much easier. Spend a few years working for another agent to build clientele and broaden your knowledge and skills.

• Have a year's worth of living expenses in the bank. Many insurance agents take a loss their first year of business. Having a year's worth of living expenses will give you the time needed to get your business off the ground.

Resources

• Progressive Independent Agent Program
• Allstate Agent Program