Obtaining Your Home And Auto Insurance License: A Comprehensive Guide

Getting a home and auto insurance license is a process that can be completed in a few weeks. The exact steps vary depending on the state, but there are some general guidelines to follow. First, decide what type of insurance agent you want to be – captive or independent. Next, choose the type of insurance policies you want to sell, such as property and casualty or life, health, and accident. Complete a pre-licensing education course and pass the relevant state insurance exam. Submit to a fingerprint and background check, then submit your insurance license application, including any necessary fees.

Choose your insurance line of authority

When it comes to choosing your insurance line of authority (LOA), it's important to understand that this will determine the type of license you'll need to obtain. LOAs refer to groups of similar insurance products that fall under a specific subject area. This means that instead of needing a separate license for each type of insurance you want to sell, you can obtain a single license for a group of related insurance products.

The six major LOAs, as defined by the National Association of Insurance Commissioners (NAIC) in the Uniform Licensing Standards (ULS), are:

• Life insurance: This includes coverage on human lives, endowments, annuities, and benefits for disability income or death.
• Accident and health or sickness insurance: This covers sickness, bodily injury, accidental death, and may include benefits for disability.
• Property insurance: This provides coverage for direct or consequential loss or damage to property.
• Casualty insurance: This covers legal liability, including death, injury, disability, or property damage.
• Variable life and variable annuity products insurance: This is related to insurance coverage provided under variable life insurance contracts and variable annuities.
• Personal lines insurance: This covers individuals and families for losses from death, injury, or property damage.

When choosing your LOA, it's recommended to focus on one insurance line at a time, especially when starting. This is because the licensing process can be challenging, and trying to learn about multiple lines simultaneously can be overwhelming. The most common LOAs chosen by insurance agents are Property and Casualty or Health and Life, as they offer a wider range of insurance products.

It's worth noting that the specific LOAs and their definitions may vary slightly from state to state, so be sure to check the requirements for your particular state. Additionally, some insurance products may have their own unique licensing requirements within an LOA, such as flood insurance.

Complete a pre-licensing education course

To obtain a home and auto insurance license, you'll need to complete a pre-licensing education course. This course will provide you with the knowledge and skills necessary to succeed as an insurance agent. While the requirement for this step varies from state to state, it is highly recommended even if your state does not mandate it.

The number of hours required for the pre-licensing education course will depend on your state's regulations. Most states that require pre-license courses will mandate between 20 and 40 credit hours of education. You can opt for online courses or in-person classes, depending on your preference and the options available in your state.

It is important to choose an approved course provider to ensure that you meet the requirements to sit for the insurance license exam. Upon completion of the course, you will receive a certificate, which you may need to present when registering for the exam.

Kaplan is a popular choice for pre-licensing education, with over 81% of readers from one source opting for their online courses. Their courses have a 93% pass rate and offer comprehensive study packages to help you prepare for the exam.

The pre-licensing education course will cover a range of topics relevant to the insurance industry and the specific line of authority you plan to pursue. This may include general insurance principles, state-specific regulations, and ethical guidelines.

By completing the pre-licensing education course, you will gain a strong foundation of knowledge that will not only help you pass the state insurance license exam but also set you up for success in your career as an insurance agent.

Pass the state insurance exam

Passing the state insurance exam is a crucial step in getting your insurance license. The exam is a timed, proctored, multiple-choice test, with around 50-180 questions, depending on the state and license type. Here are some tips to help you prepare for and pass the state insurance exam:

Know the Exam Format and Requirements:

Before starting your preparation, understand the format and requirements of the exam. The exam is proctored, which means someone will be present while you take the test. It will be administered on a computer or using paper and pencil. The exam consists of multiple-choice questions, generally with four options available as answers. There will not be an essay section, as the exam tests your knowledge of specific laws and regulations.

Choose a Reputable Pre-License Education Course:

Enrolling in a pre-license education course from a reputable insurance education company is highly recommended. It will dramatically increase your chances of passing the exam on your first attempt. Companies like Kaplan Financial Education offer exam-focused prelicensing solutions that combine readings, lectures, and videos with real-life scenarios.

Understand the Exam Content:

The content of the exam will vary depending on the state and the type of license you are seeking. For example, the Life and Health exam will have different material than the Property and Casualty exam. Familiarize yourself with the specific laws, rules, and regulations that will be covered in the exam.

Study Strategies:

• Allow yourself enough time to study; cramming is not effective for this type of exam.
• Take practice exams to familiarize yourself with the question format and test your knowledge.
• Organize your study space to ensure a comfortable and distraction-free environment.
• Use visual aids, such as flow charts and diagrams, to help with revision.
• Explain the concepts to others to reinforce your understanding.
• Take regular breaks and stay physically active during your study sessions to improve retention.
• Plan your exam day in advance, including gathering all the required identification and other materials needed for the test.

Exam Day Tips:

On the day of the exam, arrive at the test center early and bring the required identification and any other necessary materials. Stay calm and manage your anxiety by practicing deep breathing or other relaxation techniques. Read the questions carefully and use process of elimination to narrow down the choices if you are unsure of the answer. Remember, you can always come back to a difficult question and revisit it later.

Complete a background check

To obtain a home and auto insurance license, you will need to complete a background check as part of the licensing process. This typically involves submitting your fingerprints to a state-approved vendor, such as IdentoGO or Fieldprint, which will then be used to conduct a background investigation to assess your suitability for an insurance license. The background check will review your past conduct to ensure you meet the state's insurance agent regulations and confirm that you are fit to serve as an insurance agent in accordance with the applicable laws.

The process usually costs between $25 and $50 and can be initiated by registering with the relevant vendor and scheduling an appointment for fingerprinting. In Texas, for example, the cost is $41.45, and you will need to use the service code 11G6QF to ensure compliance with the relevant background check requirements. During your fingerprinting appointment, you will receive a receipt, which is necessary for your license application.

It is important to note that certain felonies, such as embezzlement, money laundering, or counterfeiting, may permanently bar you from obtaining an insurance license. However, having a criminal record does not necessarily exclude you from becoming an insurance agent, and the impact of any misdemeanors or felonies will depend on the specific state's regulations. If you have any concerns about how your record might affect your application, it is advisable to contact the relevant state department for more information.

Submit your insurance license application

Once you've decided what type of insurance you want to sell, it's time to get familiar with the general requirements. These include being at least 18 years old, completing pre-licensing education, passing the state insurance licensing exam, passing a background check, and undergoing continuing education to keep or renew your license.

After you've decided on the state in which you want to sell insurance, you can start the process of submitting your license application. You can apply for a license in Arizona, for example, by either applying online through the National Insurance Producer Registry (NIPR) or submitting a paper application (NAIC uniform license application for an Individual). NIPR online applications are generally processed more quickly than paper applications, so that may be the preferable option.

Regardless of the application method, you will need to pay required fees, which are non-refundable. If you are applying online, you can pay with a credit card. If you are applying by mail, you can pay by debit/credit card, check, or money order.

In addition to submitting your application and paying the fees, you may also need to submit fingerprints and proof of lawful presence in the United States, depending on your circumstances. For example, if you are an Arizona resident and do not already hold an Arizona insurance license, you must submit fingerprints. If you are a non-resident applying for an Arizona license, you may need to submit fingerprints if you are relocating from another state or if your home state does not issue the type of license you are seeking in Arizona.

To submit fingerprints, you will need to follow the instructions provided by the Arizona Department of Insurance and Financial Institutions. You will also need to submit Form L-152 with one of the required forms of identification to prove your lawful presence in the country, unless your fingerprints were submitted electronically.

Frequently asked questions