Best Schools To Become A Successful Auto Insurance Agent

If you're interested in becoming an auto insurance agent, you'll need to meet certain educational and licensing requirements. While some larger companies require a degree in business or finance, others may accept a college course certification in insurance, and some don't require a degree at all, preferring to train their agents in-house.

In terms of licensing, you'll need to take a training course, pass an exam, and undergo a background check. These requirements vary from state to state, so it's important to research the specific requirements in your state. Obtaining a car insurance broker license usually involves taking a course and passing an exam, and you may also need to renew your license periodically.

In addition to education and licensing, certain skills and traits will help you succeed as an insurance agent. These include an understanding of the factors that affect auto insurance rates, strong promotional and sales skills, and the ability to build relationships and grow your client base.

Educational requirements

To become an auto insurance agent, you will need to meet certain educational requirements. While the specific requirements vary from state to state, there are some general standards that you need to meet.

Firstly, you must be at least 18 years old to become an insurance agent. In addition, a high school diploma or GED is typically the minimum educational requirement. However, many companies prefer candidates with a bachelor's degree, especially in areas such as business, finance, economics, accounting, marketing, or psychology. These degrees provide a solid foundation for a career in insurance sales and can make you a more competitive candidate.

If you are unable to obtain a bachelor's degree, another option is to pursue a college course certification in the insurance field. This can often be completed in two years or less and may be sufficient for some companies.

It is worth noting that some insurance companies do not require any degree at all and prefer to train their agents themselves. These companies often provide on-the-job training, allowing you to earn while you learn and gain valuable experience in the industry.

To summarize, while the educational requirements for becoming an auto insurance agent can vary, a combination of a strong academic background and practical training will put you on the right path.

Licensing requirements

The next step is to complete pre-licensing coursework. This involves choosing a line of specialization, such as life, accident, and health (LA&H), life, health, property and casualty, or personal lines. The credit hours required for each specialization vary, with LA&H requiring 40 credit hours, Life requiring 20 credit hours, Health requiring 20 credit hours, Property and Casualty requiring 90 credit hours, and Personal Lines requiring 40 credit hours. You can take these courses online or in a classroom setting.

After completing the pre-licensing coursework, you must pass your state's insurance licensure exam. The tests are divided into LA&H and Property and Casualty (P&C), and you only need to take the exam for your chosen specialization. The tests consist of around 50 to 200 items and must be completed in two to three hours. Passing scores vary but are typically at least 70%.

Once you have passed the exam, you can apply for your insurance license by submitting an application and paying a fee to your state's insurance regulation department. The fee amount varies by state, and if you are applying for multiple specializations, you will need to pay separate fees. The review process has no set timeframe and depends on each application. If your application is approved, you can download a PDF copy of your license from the department's website, as some states do not mail printed copies.

To maintain your insurance license, you will need to pursue continuing education. Most states require a minimum of 24 hours of continuing education credits during a two-year term, including three hours of ethics training.

Captive vs independent agents

While a college degree is not a requirement to become an auto insurance agent, it is preferred by many insurance companies and can help you build a solid foundation for your career in insurance. A bachelor's degree in disciplines like finance, marketing, economics, accounting, business administration, and liberal arts can be helpful. Some colleges and universities also offer courses in insurance or risk management.

Once you have obtained your bachelor's degree, you can start thinking about whether you want to be a captive or an independent insurance agent.

Captive Insurance Agents

Captive insurance agents represent a single insurance carrier and can work full-time for an insurance agency or as an independent contractor. They may receive operational backing from their partner insurers, including office space and administrative support, as well as referrals and leads on potential buyers. Captive agents may also work as full-time salaried employees for insurance companies, and depending on their contract, they may receive commissions on top of their fixed wages. The commission rate for captive agents is typically between 5% and 10% of the value of the policies they sell.

Independent Insurance Agents

Independent insurance agents work with multiple partner insurers and can offer their clients a wider selection of policies. They often shoulder their own business costs, including office supplies, rent, and marketing expenses. Because of this, independent agents generally earn higher commissions than captive agents, receiving about 15% of the entire premiums paid for new auto policies.

Insurance types

To become an auto insurance agent, you'll need to meet certain educational and licensing requirements. These vary from state to state, so it's important to check the specific requirements for your state. However, here's a general overview of the types of insurance you may need to know about to become an auto insurance agent:

Liability Coverage

Liability insurance is required in most US states and covers damages for injuries and property damage to others as a result of an accident. There are two types of liability insurance: bodily injury liability, which covers medical expenses, and property damage liability, which covers the cost of repairing damage to other vehicles, fences, mailboxes, or buildings.

Collision Insurance

Collision insurance covers damage to your car after an accident involving another vehicle. It can help repair or replace a covered vehicle, regardless of who was at fault.

Comprehensive Insurance

Comprehensive insurance provides an extra level of coverage for incidents other than collisions. This includes vandalism, certain weather events, and accidents with animals. It also covers damage from storms, floods, falling objects, explosions, earthquakes, and hitting an animal.

Uninsured Motorist Insurance

Uninsured motorist insurance protects you if you're hit by an uninsured driver or in a hit-and-run accident. This is often paired with underinsured motorist insurance, which covers the cost if the at-fault driver's insurance isn't enough.

Medical Payments Coverage

Medical payments coverage helps pay for medical costs related to a covered accident, regardless of who is at fault. This can be useful as medical costs following an accident can be very high.

Personal Injury Protection Insurance

Personal injury protection insurance covers certain medical expenses and loss of income resulting from a covered accident. It can cover up to 80% of medical and other expenses and may also include funeral costs, childcare, or lost wages.

Gap Insurance

Gap insurance is important as car value can depreciate quickly, and an auto insurance settlement might not cover the remaining loan amount. Gap insurance covers the difference between the car's value and the loan amount owed.

Towing and Labor Insurance

Towing and labor insurance reimburse you for towing and repair costs if your car breaks down. This is available if you have comprehensive car insurance.

Rental Reimbursement Insurance

Rental reimbursement insurance covers the cost of a rental car if your vehicle is unusable after an accident.

Classic Car Insurance

Classic car insurance provides specialized coverage for vintage and classic cars, which may not be covered by standard policies.

Continuing education

While there are no specific schools to become an auto insurance agent, there are several educational paths you can take to enter the field. Most insurance companies do not require a specific degree, but certain educational backgrounds are considered advantageous. For instance, a degree in auto repair from a vocational or junior college can be beneficial for working in the auto insurance industry. Additionally, a bachelor's degree in fields like finance, marketing, economics, accounting, business administration, or liberal arts can provide a solid foundation for a career in auto insurance sales.

Once you have entered the field, continuing education is an important aspect of maintaining your auto insurance agent license and staying up-to-date with industry developments. Here are some key points about continuing education:

Licensing and Continuing Education Requirements:

Each state has its own licensing requirements for auto insurance agents, and these requirements dictate the necessary education. In some states, auto insurance adjusters must complete pre-licensing classes and pass a licensing exam. Additionally, certain states mandate that auto insurance adjusters earn a set number of continuing education credits annually to maintain their licenses. These credits can be obtained through workshops, conventions, and distance-learning classes.

Maintaining Your License:

To maintain your insurance license and keep your skills current, most states require you to complete a minimum of 24 hours of continuing education (CE) credits over a two-year period. These credits often include three hours of ethics training. The specific requirements, timeframes, and due dates vary across different states, so it is important to refer to the regulations in your state.

Benefits of Continuing Education:

Frequently asked questions