How to Become a Car Insurance Agent

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Important facts to know...

  • Any who sells car insurance or recommends car insurance products must have a license to sell in the state
  • If you’re selling insurance in multiple states, you need to be licensed in each of the states you do business in
  • When you’re an agent for a specific company, you’ll need a producer’s Property & Casualty license in the state
  • If you’re going to be a broker, you’ll need a special broker license that’s issued by the Department of Insurance
  • Most states require you to pass a written exam given by the licensing department before you’ll be licensed

Car insurance agents do more than just sell an insurance product; agents sell peace of mind and financial protection.

When a consumer visits an insurance agency and sits down with a sales agent to discuss their agents, they trust that the professional they are sitting with is going to recommend the right coverage.

Since a lot of trust is put into the abilities of a sales agent, they need to possess a professional license.

Applying for a professional license is a process. Much like you have to train to get a driver’s license, you’ll have to complete some training before you can take a licensing exam. The licensing requirements vary from state to state.

If it has been a while since you checked car insurance rates for yourself, use our free comparison tool to find the best deal for your car insurance needs.

If you’re interested in switching career paths, here’s what you need to know about becoming an insurance agent:

How long has the insurance industry been around?

The insurance industry isn’t a new one. In fact, companies like Lloyd’s of London have been selling insurance of some kind to shipowners and merchants who ferried exotic goods to colonies since the 1600s.

In the 1750s, Americans like Benjamin Franklin also started to sell his own form of insurance protection by starting the first fire insurance company in America.

In the last two centuries, insurance products have changed dramatically. Ever time a new risk arises, there’s a new type of policy or a new provision that must be added to the standard insurance contract.

The insurance industry is a highly regulated one and all of the providers and producers in the industry have to comply with state laws.

Why should you consider becoming an insurance agent?

Since the insurance industry has been around for more than two centuries and it’s an industry that’s thriving, it is one to consider working in. One of the first things to look at before you’re planning on entering any industry is to see what the projected job outlook is in the field.

According to data that has been collected by the Bureau of Labor Statistics, the job outlook for agents is faster than average. About 43,500 positions will be created by 2024.

Lucky enough for you, car insurance is something everyone has to have. Since it’s a state requirement, the field thrives even when the economy is in a downturn.

Companies in the industry haven’t had to lay off a significant number of agents because they have cut costs by modernizing their operations. There’s still a need for agents, no matter the state of the economy because the companies are focusing on marketing and production.

Do you need to have a professional license to sell insurance?

Learning that the demand for insurance agents is expected to continue as more and more companies focus on profitability is enough to drive you to start studying to earn your license.

If you’re going to eventually sell insurance, you’ll have to do what it takes to earn your Property and Casualty Insurance. A P&C license certifies that you can sell the following types of insurance:

  • auto
  • home
  • business

Getting Hired by an Insurance Company

You have to decide if you’d like to become an agent independently or if you’d rather get hired as an entry-level professional before you take any classes.

It’s very common for young adults and experienced professionals who are transitioning to a new field to apply for trainee insurance agents positions before enrolling in a class.

The benefit of getting the job before you have your license is that your employer is going to pay for the following:

  • your training
  • your licensing fees
  • your fingerprinting fees

You would think that having your license could benefit you, which is could, but many of the larger insurers like the blank canvas idea. That means that the trainee agent doesn’t have bad habits and they can learn the carriers methods from the start.

Enroll in a Property and Casualty Licensing School

All insurance companies will require you to possess a high school diploma before you’re eligible for a trainee position. Some companies have even stricter requirements that say that you have to have a college degree.

No matter what your level of education is, you will have to complete specialized training.

The specialized training that’s required varies by state. Most state insurance departments require prospective insurance agents to complete a one-week or two-week class at an approved insurance school before they can even sit for the test.

The training covers the following:

  • insurance terms
  • coverage options
  • codes
  • ethics

If you’re hired by an insurance company, they will set up your training and send all of the new hires with you. The training is completely paid for and the insurance carrier will pay for the training materials.

If you’re doing the training on your own, you’ll have to find a list of locations where approved courses are offered. Once you choose the location, you’ll have to schedule your training, pay, and get your completion certificate.

Completing Your State’s Licensing Exam

Once you complete the insurance class and you meet all of the pre-licensing requirements, you’ll be eligible to sit for the state licensing exam. You must possess a license in each state that you want to sell property and casualty insurance policies.

Some states allow companies to administer the exam but most require test takers to go to an examination site.

You have to submit the following:

  • your application
  • your payment for the exam
  • your certification that shows you’ve completed training
  • a signature showing you consent to a background check

After this, you’ll be given an exam date and instruction on what to do the morning of your exam.

After You Pass

If you get an acceptable grade on your examination, the administrator of the test will let you know before you leave.

You’ll receive a paper certifying that you passed. If you haven’t been fingerprinted yet, you’ll have to wait until you pass your background before you can sell insurance.

The average car insurance agent in the United States earns $35,000 per year. In some states, where premiums and commission rates are higher, that average can spike up dramatically.

While some consumers find that using online rate comparison tools is an effective way to find the best deal, there’s still a growing need for agents to service and upsell clients.

Compare car insurance rates today to find our how much you could save on the coverage you need.

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