Becoming An Auto Insurance Agent In Michigan: A Guide

To become an auto insurance agent in Michigan, you must obtain a Michigan insurance license. The process involves four steps: figuring out which insurance license you need, submitting your insurance license application, completing a pre-licensing education course, and passing the relevant Michigan insurance license exam(s).

The type of insurance policies you want to sell will determine the type of license you need. For example, to sell auto, home, or business insurance, you'll need a Property & Casualty (P&C) license.

After choosing the insurance line, you'll need to submit an Electronic Resident Licensing (ERL) application through the National Insurance Producer Registry (NIPR) website. This application process involves a fee and background checks.

The next step is to complete a pre-licensing education course. The course must meet certain criteria and will vary in length depending on the type of insurance license you're pursuing.

Finally, you'll need to pass the relevant Michigan insurance license exam. These exams are multiple-choice and must be taken within 12 months of completing your pre-licensing education.

Complete a pre-licensing course

To become an auto insurance agent in Michigan, you'll need to complete a pre-licensing course. This is a crucial step to increase your chances of passing the Michigan Insurance License Exam on your first attempt, saving you time and money.

There are several options available for completing the required pre-licensing education. You can choose from in-person courses, live webinars, or self-study courses. These courses are designed to provide you with the knowledge and skills needed to sell insurance in Michigan.

When selecting a course, consider factors such as flexibility, price, and the reputation of the provider. The course you choose should cover the specific type of insurance you want to sell, such as Property and Casualty (P&C) or Life and Health insurance.

The Michigan School of Insurance, for example, offers both in-person and live webinar courses that include access to e-books and practice exams. Their courses have a 5.0 average rating.

Another option is the National Online Insurance School, which is certified by the Michigan Department of Insurance and Financial Services. They offer a 100% online exam prep course that covers Michigan laws and regulations and satisfies state credit hours.

Kaplan Education Company is also mentioned as a recommended option for pre-licensing education. They offer Live Online, Live, OnDemand, and Self-Study Online insurance licensing solutions.

It's important to choose a course that meets the requirements under Michigan Compiled Laws § 500.1204a. The minimum required hours of instruction will depend on the type of insurance license you're pursuing:

• Life/Limited Life: 20 hours
• Accident & Health: 20 hours
• Life and Health: 40 hours
• Property and Casualty: 40 hours
• Personal Lines: 20 hours of Property and Casualty
• Property, Casualty, and Personal Lines: 40 hours of Property and Casualty

Additionally, some pre-licensing courses may have specific pre-study requirements. For example, the Life and Accident & Health Accelerated Courses from Kaplan require pre-study and classroom attendance, with a minimum number of pre-study hours completed before attending live classes.

By completing a comprehensive pre-licensing course, you'll gain a strong foundation in the principles of insurance and increase your chances of successfully obtaining your Michigan insurance license.

Pass the Michigan Insurance License Exam

To pass the Michigan Insurance License Exam, you must first complete a pre-licensing education course. This course will cover the relevant insurance principles and professional ethics and Michigan insurance laws. The number of hours of instruction required will depend on the type of insurance license you are applying for. For example, a Property and Casualty license will require 40 hours of instruction, while a Life license will require 20 hours.

After completing your pre-licensing education course, you must then register for and schedule your Michigan Insurance License Exam. The exam will take the format of a multiple-choice test, and you must achieve a passing grade, or "cut score", which is subject to change, so be sure to check the Michigan Department of Insurance and Financial Services' most recent Examination Content Outlines. You can schedule your exam and pay the $41 exam fee online through the PSI Exams website or by phone.

It is recommended that you allow between two to six weeks of study time for the exam, depending on whether you are studying full-time or part-time, and your comfort level with taking proctored exams.

Submit your insurance license application

To submit your insurance license application in Michigan, you need to follow these steps:

Step 1: Choose the insurance line you want to apply for

The type of insurance policies you want to sell will dictate the type of license you need. For example, to sell auto, home, or business insurance, you need a Property & Casualty (P&C) license. Alternatively, if you want to sell life insurance products, you would need a Life and Health license.

Step 2: File an Electronic Resident Licensing (ERL) application

You can do this through the National Insurance Producer Registry (NIPR) website. This will cost $10, plus a $5 transaction fee, and your application will be valid for 180 days from its entry into the Michigan Department of Insurance and Financial Services's (DIFS) database.

Step 3: Provide background information

As part of your application, you will need to answer several questions about your background, which will be reviewed by DIFS. Make sure to double-check all the information you provide, as your application may be denied if you answer a question incorrectly, even if unintentionally.

Step 4: Background checks

DIFS will also carry out several background checks to ensure you meet the state's insurance producer regulations. While your application won't be automatically denied if you have a felony conviction, it will be denied if you don't report it. DIFS recommends not applying if you have been convicted of a felony in the last 10 years, especially if it involves violence, criminal sexual conduct, or financial crimes.

Step 5: Additional considerations

If you are applying for multiple lines of authority, remember that you will need to complete the pre-licensing education, pass the relevant state exam, and pay a filing fee for each one.

Choose a means of selling

Once you've passed your exams and your licensing application has been approved, you'll be a qualified insurance agent in Michigan. Now, you'll need to choose a means of selling. Here are some options to consider:

Captive Agent

As a captive agent, you'll be employed by a single insurance company and sell their products exclusively. This option provides more stability and often comes with a base salary, but it limits your ability to compare different insurance products and find the best fit for your clients.

Independent Agent

Alternatively, you can run your own business as an independent agent. This allows you more freedom to work with multiple insurance companies and offer a wider range of products to your clients. However, it also requires more responsibility and effort in building and managing your own business.

Choosing the Right Option

When deciding between these options, consider factors such as your level of experience, your business goals, and the amount of flexibility and independence you desire. You may also want to research the compensation models for each option and choose the one that aligns best with your financial goals. Additionally, you can explore opportunities for growth and advancement within each path to ensure you're making an informed decision.

Keep your license valid

To keep your license valid, you'll need to renew it every two years by completing 24 credit hours of state-approved continuing education. Of these 24 hours, at least three must be dedicated to ethics coursework.

The cost of renewing your license will include the cost of your continuing education course, which can vary depending on the educational provider you choose.

It's important to note that if you fail to achieve a passing exam score within 12 months of completing your prelicensing education course, you'll be required to redo the coursework before you can attempt the state insurance exam again.

Frequently asked questions