Becoming A Non-Standard Insurance Independent Agent: A Guide

Becoming an independent insurance agent is a lucrative career option for those seeking flexibility, a good income, and the opportunity to help people. Independent insurance agents, also known as insurance brokers, offer policies from multiple companies, creating a competitive environment that benefits clients. To become an independent insurance agent, you'll need to complete a few essential steps, including obtaining a high school diploma or GED, completing an insurance study course, and passing a licensing exam. Let's explore the key requirements and steps to embark on this rewarding career path.

Get educated

To become an independent insurance agent, you need a high school diploma or GED. A bachelor's degree is not necessary, but it may improve your long-term career prospects. A degree in finance, marketing, business administration, or even insurance (offered by some colleges) could be beneficial.

Each state requires insurance agents to pass an exam to obtain their licence. Before taking the exam, you must complete a study course that covers the test material and other relevant topics. Some insurance companies offer on-the-job training with a licensed insurance agent to help you become familiar with the industry.

The requirements to take the exam vary between states, so be sure to check with your state licensing body. Some states require you to complete a training programme beforehand, while others have no expectations.

The cost and process of getting an insurance licence also differ from state to state. For example, in Georgia, the Department of Insurance charges a total of $150 per licence. Most states require you to complete a pre-licensing course, which can be done online or in person. The National Insurance Producer Registry (NIPR) has state-specific information on licensing requirements and fees.

Education requirements vary, ranging from a one-day class to 20-40 hours of online training. After fulfilling any pre-exam requirements, you can schedule your official licensing exam. An outside company usually proctors these exams at a designated testing site. You will be placed at a computer and given a multiple-choice test covering insurance terminology, numbers, and practical scenarios.

You need a score of 70 or higher to pass, and you will find out your result immediately after submitting the exam. If you don't pass on your first attempt, you can reschedule and try again.

Complete requirements for a license

To become a licensed independent insurance agent, you will need to meet several requirements. These requirements vary by state, so it is important to review the specific mandates for your state. However, there are some general guidelines and common steps that you should follow.

Firstly, you will need to decide on the type of insurance agent you want to be. The two main options are captive agents, who work with only one company, and independent agents, who work with multiple insurance companies. As you are interested in becoming an independent insurance agent, this is the path you should choose.

Next, you will need to decide on the type of insurance products you want to sell. This could include commercial insurance, such as general liability insurance, commercial property insurance, and errors and omissions insurance, or personal insurance, such as motor vehicle, homeowners, and life insurance.

Once you have decided on the type of insurance you want to sell, you can review your state's licensing requirements. Each state has its own custom requirements, which you must meet to obtain your license. For example, some states mandate a pre-licensing course, which can range from 20 to 40 hours of training, while others require a background check and fingerprints. It is important to note that individuals who operate without a license may face penalties or legal action.

After you have reviewed your state's specific requirements, you will need to take and pass the insurance license exam. This exam is typically held at a testing site, where you will be placed at a computer and given a multiple-choice test. The test usually lasts for two to three hours, and you will need a score of over 70% to pass. If you do not pass on your first attempt, you can reschedule and try again.

Upon passing the exam, you will need to submit your license application and complete any necessary background checks. Some states may require fingerprints as part of this process. Once your application has been approved, you will be able to legally discuss and sell insurance policies.

The final step in the licensing process is to get appointed by an insurance company. To sell their insurance products, you will need to complete an application with each company you plan to work with and be granted an appointment and binding authority, which will be recorded on your state insurance license.

Get a license

To get a license to become a non-standard insurance independent agent, you will need to follow these steps:

Decide on the Type of Insurance Agent and Products:

Firstly, decide if you want to be a captive or independent agent. Captive agents work with a single company and sell their products, while independent agents work with multiple companies and offer a range of policies. Then, decide on the type of insurance products you want to sell, such as commercial or personal insurance. This choice will impact the type of license you need.

Review State Licensing Requirements:

Each state has its own licensing requirements, so research the specifics for your state. Some common licenses include the Property and Casualty License and the Life, Health, and Accident License. You may need multiple licenses, so check with your state's department of insurance or the companies you plan to represent.

Take the Insurance Exam:

Most states require you to complete a pre-licensing course before taking the exam. These courses can be online or in-person and vary in duration. After fulfilling the pre-exam requirements, schedule your official licensing exam with an outside company. The exam is usually in a multiple-choice format, and you will find out your result immediately.

Submit Required Documents and Complete Background Check:

Once you've passed the exam, submit all necessary documents to your state licensing department. This may include a background check and fingerprints, which are designed to prevent fraud.

Get Appointed by an Insurance Company:

As an independent agent, you will need to be appointed by the insurance company to sell their products. Complete an application with each company you want to work with and gain binding authority to sell their insurance.

Find and Maintain Clients:

Start building your client base. Many agents begin by insuring themselves and prospecting to friends and family. You can also market your agency through various channels, such as creating a website, joining local organisations, or advertising locally.

Protect Your Business with Insurance:

Ensure your agency is protected with commercial insurance. Consider general liability insurance, errors and omissions insurance, workers' compensation insurance, and other relevant types of coverage.

The process of getting licensed can vary in duration, but it typically only takes a few weeks to become an insurance agent.

Search for a job

Once you have completed the necessary education, licensure, and registration, you can start searching for a job as an independent insurance agent.

Job Search Tips

• Start by prospecting your friends and family. Selling insurance to people in your immediate social circle will give you a feel for the process.
• Understand customer behaviour and leverage your learnings into practice.
• Learn how to sell insurance online to capture a broader market.
• Ask for referrals and recommendations to reach more potential clients. Word-of-mouth recommendations are essential when you're starting out.
• Advertise to both insurance companies and prospective clients. Cover both online and local advertising to reach as many clients as possible.
• Market yourself to insurance companies and prospective clients.
• Network, use social media, and get involved in the community to build trust.
• Stay informed and keep up with the latest insurance products and market trends.
• Stay on top of changes in legislation and the industry.

Where to Look for Jobs

There are many job sites that post insurance agent jobs, such as Indeed.com. You can also look at job postings on major job sites or contact your own insurance agent for recommendations.

Advertise

Advertising is a crucial aspect of becoming a successful independent insurance agent. Here are some effective strategies to market yourself and your business:

Online Presence

Creating a strong online presence is essential to reach potential clients who frequently use the internet. Build a well-designed, user-friendly website with a memorable URL. Make sure your website is mobile-friendly, as many people browse the web and conduct business on their smartphones. Utilise social media platforms like LinkedIn, Facebook, and Twitter to connect with clients and showcase your expertise. Consider creating online slideshows, podcasts, and webinars to educate your customers about the insurance products you offer. Additionally, invest in search engine optimisation (SEO) to improve your website's visibility on search engines like Google and Bing.

Community Engagement

Get involved in your local community to increase your visibility and build a positive reputation. Sponsor or host community events, such as charity events or sports tournaments. Participate in local networking events, chamber of commerce meetings, and community meetings to connect with potential clients and business owners. Hand out business cards and consider creating an agency mascot to make your business more approachable and memorable.

Referrals and Word-of-Mouth

Encourage referrals and word-of-mouth recommendations by providing excellent service. Satisfied clients are more likely to refer you to their friends, family, and colleagues. You can also implement a client referral program to incentivise referrals.

Creative Strategies

Think outside the box with creative marketing strategies. For example, you can include your contact information on wallet cards with local emergency numbers or create keychain tags with your agency's details. Offer free promotional items like pens, magnets, or even free lemonade during summer or hot chocolate in winter. These items will keep your agency's name at the top of your clients' minds.

Partnerships and Collaborations

Collaborate with other professionals in your network by entering referral agreements. For instance, you can share business leads with an accountant and, in turn, receive restaurant client referrals. You can also partner with local businesses to create discount cards for mutual customers.

Traditional Advertising

Explore traditional advertising avenues like television, radio, and print media. Consider advertising on pizza boxes or sponsoring a local sports team. Advertise in church bulletins or local newspapers, especially if you can contribute content or write a column related to insurance.

Client Retention

Prioritise client retention by providing exceptional customer service. Send email newsletters, conduct annual policy reviews, and encourage positive online reviews. Show your appreciation by hosting client appreciation events or dinners.

Stay Informed

Stay up-to-date with the latest insurance products and market trends. Continuously educate yourself on changes in legislation and industry developments to provide the best service to your clients.

Remember, the key to successful advertising as an independent insurance agent is to be creative, build relationships, and utilise a variety of marketing channels to reach your target audience.

Frequently asked questions