Get An Agent License: Auto Insurance Guide

If you're thinking of becoming an insurance agent, you'll need to get a license. The requirements for obtaining a license vary depending on the state and area you plan to work in, but the process typically involves several steps, including deciding on the type of insurance you want to sell, completing pre-licensing education, passing a state exam, undergoing a background check, and submitting your license application. The entire process can generally be completed within a few weeks, making it a relatively quick career change.

Meet eligibility criteria

To become a licensed insurance agent, you must meet certain eligibility criteria. These vary from state to state, but there are some common requirements.

Firstly, you must be at least 18 years old, which is the minimum age to apply for a license in most states. You must also have no fraud or felony charges and no outstanding federal or state income taxes. You will also need to pass a background check, and in some states, you must not have any past-due child support to qualify for a license.

In addition to these criteria, you will need to complete pre-licensing education. This involves choosing an insurance line, or line of authority, to specialise in. Common specialisations include life insurance, health insurance, property insurance, and casualty insurance. The pre-licensing coursework covers a range of topics, including different types of insurance policies, insurance industry regulations, and insurance principles. The number of hours of pre-licensing education required varies by state, from a one-day class to 20-40 hours of online training.

If you already hold certain designations, such as a Chartered Life Underwriter (CLU) or Chartered Property Casualty Underwriter (CPCU), you may be exempt from some parts of the pre-licensing education and state licensure examinations.

Once you have met the basic eligibility criteria and completed any necessary pre-licensing education, you will be ready to move on to the next steps of becoming a licensed insurance agent, including passing your state's insurance licensure exam and submitting your license application.

Complete pre-licensing coursework

To get an agent license for auto insurance, you will need to complete pre-licensing coursework. This is a requirement in most states, although the specifics may vary depending on the state and the type of insurance license you are seeking. For example, in New York, the number of pre-licensing hours required ranges from 20 to 90 hours, depending on the license type. Similarly, Ohio requires 20 hours of pre-licensing education for a single line of insurance or 40 hours for a combined line.

The pre-licensing coursework will cover various topics relevant to the insurance industry, such as insurance basics, policies, and regulations. For instance, a course on property and casualty insurance may cover homeowner policies, business owner policies, auto insurance, and property and casualty insurance fundamentals. On the other hand, a life and health insurance course might delve into life insurance fundamentals, annuities, disability insurance, medical plans, and health insurance corporations.

When choosing a pre-licensing course, it is essential to consider your learning style and preferences. You can opt for a live, in-classroom course or an online interactive video-led course. Online courses offer the advantage of flexibility, allowing you to complete the coursework at your own pace and repeat sections as needed. On the other hand, live courses provide the structure and reinforcement of learning in a classroom setting with an instructor.

Additionally, it is advisable to review the course material delivery methods. Effective courses often employ various interactive activities, such as videos, quizzes, and exams, to enhance your comprehension and retention. It is also beneficial to look for courses that offer support during your learning journey, such as email or phone assistance from instructors.

Lastly, when selecting a pre-licensing course, be mindful of the time commitment required. While online courses typically offer greater flexibility, ensuring that you can balance your studies with other commitments, live courses usually span 3-5 days and are scheduled just before the licensing exam.

Pass state licensure exam

Passing the state licensure exam is a crucial step in becoming a licensed insurance agent. Here are some detailed instructions to help you prepare for and pass this exam:

Understand the Exam Format:

The state insurance licensure exam typically consists of multiple-choice questions, with no fill-ins or essay questions. The tests are proctored, meaning you will take them under supervision in a classroom setting. Each exam has between 50 and 200 questions and must be completed within two to three hours. The passing score varies by state but is usually around 70%.

Complete Pre-Licensing Coursework:

Before taking the exam, you will need to complete pre-licensing coursework to prepare. This includes choosing an insurance line, or "line of authority," that you want to specialize in. Common lines include life, accident, health, property, and casualty. You can take the pre-licensing courses online or in a classroom setting, and they typically cover topics such as different types of insurance policies, industry regulations, and insurance principles.

Study and Prepare:

The state insurance licensure exam is known for its difficulty, with a passing rate of around 60%. Therefore, it is essential to dedicate sufficient time to studying and preparation. Review the course materials, practice with sample questions, and consider using exam prep resources or courses to enhance your understanding of the material.

Register for the Exam:

To register for the exam, it is recommended to call the testing company, such as PearsonVue, at least three days in advance of your preferred test date. The earlier you sign up, the more likely you are to get your preferred test date.

Take the Exam:

On the day of the exam, arrive at the testing site on time and bring the required identification documents. During the exam, focus on reading and understanding the questions carefully. The exam usually covers a range of topics, including definitions and terminology, numerical problems, and practical application. Stay calm and carefully consider each question before selecting your answer.

Review the Results:

Once you finish the exam, you will immediately receive your results. If you pass, you can proceed to the next steps of obtaining your insurance agent license. If you don't pass, don't be discouraged. You can reschedule and take the exam again, using your previous attempt as a learning experience.

Pass background check

To pass a background check for an auto insurance agent license, you must meet your state's licensing regulations. Each state has its own insurance agent licensing requirements, which often include background checks and/or fingerprinting. Twenty-five states require fingerprints as part of the background check, which are run through the FBI Criminal Database to check for any past or present felony convictions.

Most other states and the District of Columbia require identification and/or background checks for the past seven years. This can include a criminal history record from your state's law enforcement agency or your current Certificate of Good Standing.

If you have a criminal conviction, it is important to be honest and disclose this information during the background check. Failure to disclose disciplinary actions or crimes that occurred can be considered an attempt to obtain a license by fraud or misrepresentation and could result in the denial and/or delay in processing your application.

If you have a felony on your record, whether or not you can obtain an insurance license depends on the type of felony, how long ago it was committed, and any actions you have taken for rehabilitation. In some cases, you may be offered a restricted license, which will remain on probationary status for a minimum of three years.

For DUIs, whether or not you can obtain an insurance license depends on how the offense is classified—as a misdemeanor or felony. Most states consider a first-time DUI conviction a misdemeanor, while an often-repeated DUI is always considered a felony. If you receive a misdemeanor DUI conviction, you will likely be able to obtain an insurance license.

If you are concerned about how your background may affect your ability to obtain a license, you can contact your state's Department of Insurance for guidance.

Submit license application

Once you've passed your state's insurance license exam, you'll need to submit your license application. This is typically done through the National Insurance Producer Registry (NIPR) and will be accompanied by a filing fee that can range between $20 and $150 depending on the state and the lines of authority you're applying for. In Texas, for example, the fee is $50 (plus a small transaction charge).

Be aware that some states require applicants to submit their application earlier in the process. For instance, in Florida and Michigan, applications are submitted straight after choosing an insurance line.

After submitting your application, all that's left to do is wait. Processing times vary by state, ranging from a couple of weeks to a few months. The state will notify you by email once the review has been completed.

If you're applying for a license in multiple lines, you will need to submit an application (and pay a filing fee) for each.

Frequently asked questions