How to Start an Insurance Company – NerdWallet

Starting an policy agency is a lot like starting any business. You ’ ll indigence to choose a business structure, register and license your business, get indemnity and more. But you ’ ll besides need to become a license policy agent and learn how to navigate a highly determine field. hera ’ s how to get started.

1. Become a licensed insurance agent

You can get an insurance agent license in a matter of weeks or months, depending on the requirements in your state. here are the steps to follow : Learn about your state ’ s licensing action. The National Insurance Producer Registry or your country ’ s branch of the Independent Insurance Agents and Brokers of America can help you understand those specific requirements. Decide what type of insurance to sell. You can be licensed to sell respective different “ lines of authority ” or types of policy. The most across-the-board lines of authority include :

  • property .
  • casualty .
  • Life .
  • Accident and health or sickness .

The names of these lines of assurance may differ in your state of matter. You can be licensed to sell multiple lines of assurance. Life and health are often offered as one package, as are property and casualty. In general, most types of occupation policy are property or fatal accident policies. With a property and casualty license, you can sell personal and commercial indemnity. Most agents choose to specialize in one or the early, though. Take a pre-licensing classify. Your coursework should focus on the type of insurance you choose to specialize in. Courses can be done in person or on-line in most states. Schedule your license examination. These are normally administered at testing centers run by third-party screen companies, which may immediately inform you of the results. Apply for your license. Submit your licensing application to your state ’ second governing soundbox. You ’ ll need to provide personal information, such as your Social Security number, date of birth and residency information, and pay any applicable fees. If your application is approved, you ’ ll be able to sell indemnity products. If you ’ re new to selling policy, you may want to get some feel working for an policy company or another brokerage house before venturing out on your own.

2. Write a business plan

Your commercial enterprise design outlines what you want your business to look like and how you plan to get there. The summons of writing it should force you to answer complex questions, like what unique measure you ’ ll extend customers and how much money you ’ ll necessitate to get started.

3. Choose a business structure

Your occupation structure determines how your occupation profits are taxed and how your personal and business assets are kept separate, among other things. There ’ s besides an insurance-specific question you ’ ll want to answer : Whether you want your insurance agency to work with one specific insurance company or with many different providers. prisoner agents ( agents who work with a particular indemnity party ) can benefit from brand realization and don ’ t have to convince insurers to work with them. But, on the other hired hand, they can alone sell a limited suite of policy policies. For case, State Farm works with a network of autonomous contractile organ agents who run their agencies but only sell State Farm products. many other insurance representation owners are independent agents, selling products from multiple indemnity companies. autonomous agents might have to work hard to establish and market their sword to customers and insurers, but they can start relationships with many indemnity providers.

4. Register and license your business

Before running your occupation, you ’ ll need to register with your state, typically with the secretary of state ’ second office. Most policy businesses will credibly need to apply for an employer identification count from the IRS. With an EIN, you can open a business bank account. As character of this process, make certain to obtain a business license, a sales tax license and any other documents your country or city requires. Your business entity may besides need a license from your state ‘s insurance department. Check your submit ’ randomness requirements to find out what you need.

5. Get business insurance

As an policy agent, you already know how authoritative it is for your customers to be fully insured. Get business policy to protect your business assets. Most insurance companies are likely to need professional liability insurance and cosmopolitan liability indemnity. Depending on your agency ’ randomness size, location and daily activities, you may besides need commercial car policy, workers ’ compensation insurance and other types of clientele insurance.

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6. Form relationships with insurance companies

If you ’ re an independent agent, you ’ ll need to apply to work with any insurance companies whose products you want to sell. If they approve your application, they ’ ll grant you an appointment to sell their policies. It can be challenging to start relationships with indemnity companies directly without having several years of feel and a node floor. Joining a professional affiliation, like the Independent Insurance Agents and Brokers of America, or an agentive role network like Smart Choice, can help you access insurance providers to sell their policies. These groups may besides provide market materials, discounts on your business insurance policies, and other resources.

7. Grow your client base

If you choose to start an independent agency, you may have to hustle for your first base few clients. Start by joining your local Chamber of Commerce, attending network events and advertise in your local grocery store.

Having an on-line bearing is all-important, excessively. Make sure your web site clearly outlines what kinds of policy you sell and the customers you serve. information about how to contact you should be easy to find. If you start an agency affiliated with a particular insurance company, you might get referrals as customers seek out agents near them. however, you ’ ll probably need to do local selling excessively .

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