Starting an insurance company can be a large and complicated endeavor, and it takes years to obtain financing. However, this does not have to be the case for everyone. If you want to have your own insurance agency, start earlier and follow the necessary steps to get started.
How to Start An Insurance Company in America
Read more to learn how to start an insurance company in your state.
Choose a specialization
Most insurance agents sell various types of insurance including health, life, auto, flood, and homeowner’s insurance. If you plan to start your own insurance company, it is best to specialize in all areas.
Become a licensed insurance agent
Before opting to sell insurance, you will need to pass several state tests. These assessments test your knowledge of various types of insurance and plans. Once you have passed these evaluations, you will receive the insurer’s license.
Work at an insurance agency
New agents are not eligible to have their own agency. You should gain around five years of experience. You can choose to work as an employee for an insurance firm or be an independent contractor for an insurance company. With this last option, you can work from home and set your own hours.
Get a corporate insurance license
Once you are eligible to start your own insurance company, you will need to obtain a corporate insurance license. This will enable you to sell insurance products under your company name.
Apply for a business loan
Unfortunately, starting an insurance company is not cheap. It can cost between $ 100,000 and $ 1,000,000. You must have an excellent credit history, a lot of work experience, and a good business plan.
Buy a franchise
There are different ways to start your own insurance company. You can open a franchise and work as an independent agent for a well-known insurance company. Some franchises offer private financing.
Open your own insurance company
If you don’t have enough starting capital for a franchise, open your own private firm. You will need to establish a relationship with insurance brokers and financial companies. They will offer insurance products.
Search for a location
Once you’ve secured a business loan, it’s time to find the location of the store. Better to start small. Choose a small location that has ample foot traffic, and is perhaps inside a bustling mall or near a major intersection.
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How to be an independent insurance agent
Being an independent insurance agent has all kinds of benefits, but – without a doubt – the most relevant are flexibility, the ability to set your own schedule, enjoy a cozy workspace and produce money at your own pace.
The best thing is that, despite being a freelance job, as you gain experience and clientele, you will be able to obtain an excellent remuneration that will allow you to cover all your expenses and give yourself some luxuries during the year.
Find out what you need to work on behalf own selling insurance policies and Make the most of every second of your time.
How to be an independent insurance agent in America
While passion for the job, discipline, and motivation are essential factors for you to become an independent insurance agent, you will need to meet some requirements which include;
Step 1: Obtain an authorization card as an insurance agent
The institution that regulates independent insurance agents in the USA is the National Association of Insurance Commissioners (NAIC). In order for this organization to grant you an authorization card as an insurance agent, you will have to go to their offices and provide the following documents:
- Valid official identification
- Child-sized color photograph
- Birth certificate
- Certificate of studies with a minimum level of high school
- Unique Population Registry Code (CURP)
- Taxpayer identification card
- Proof of address less than three months old
- Proof of payment of corresponding rights for 3,487 pesos
- Submit an error and omission insurance policy
The error and omission insurance policy are especially important because it will protect you from any unforeseen events that may arise during your work, including litigation for damages and defense expenses.
Once you submit all the documents , you will only have to pass the authorization exam with a minimum score of 7.
Step 2: Apply to Insurance Companies
When you obtain your authorization card as an insurance agent, you should start applying to different insurance companies. To do this, you can register a legal framework that defines your business or do it directly as an independent professional.
Normally, the requirements that insurance companies ask of participants who choose this position are:
- Have finished high school
- Have an accredited ID
- Attend agency interviews and evaluations, such as the general survey and skills inventory
If you are selected, you will have to sign a contract with the insurance company and go through a period of formal training to learn in-depth the general and specific aspects of each of the products in their portfolio.
Step 3: Decide where to work from
Many independent insurance agents seek to work from a small office. If you want, you can also do it from home, but it is recommended that you set aside a space and condition it with everything you need.
The important thing is that you have a comfortable, equipped, and quiet place where you can concentrate and feel productive.
Step 4: Position yourself in the market
From this moment on, it is time for you to start offering insurance policies. You can start doing it among your acquaintances and then venture into the online market.
One of the resources that many insurance agents exploit is digital marketing and social media. If you want, read up on the subject and do the accounts yourself or set aside a little from your budget to advertise.
- Get updated every time the insurers you work with launch new products on the market. Your customers will appreciate that you know what you sell
- Read about common hurdles independent insurance agents face. So you can properly prepare for any future situation
- Familiarize yourself with sales and customer service techniques. This is a job where you will have to use your socializing power to build your client portfolio.
Establish from the beginning what your personal and professional goals are and design strategies to achieve them in the short, medium, and long term