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The typical homeowners insurance policy covers damage resulting from fire, windstorm, hail, water damage (excluding flooding), riots and explosion as well as other causes of loss, such as theft and the extra cost of living elsewhere which the structure is being repaired or rebuilt. The roofing company is pressuring them to set an appointment for someone to come out and help them choose shingles, go over cost, and schedule the job but my mother is leary about not knowing in advance what the cost estimate is and not having the opportunity to get competitive bids. I never started work until I had an agreed price with the insurance company and that price was reflected to the penny on the repair contract with my customer. Every year, I easily spend over $1000 on auto insurance and another $2,000 in health insurance. And a couple thousand more in homeowners insurance, flood insurance, and life insurance. Insurance is great when we need to use it. But for the many of us that end up never using it, it’s a lot of cost to have to deal with.

So as you can see, by building up your client list, you can have residual income as long as you service and keep your clients happy. A typical agent may charge somewhere between $50-$300 as the broker fee, and this is on top of the commission you will receive from the insurance company. People in the industry will say that you can make more money servicing business clients because commercial insurance policies are much more compared to the personal insurance. The problem with this is that commercial insurance will typically require additional training and experience because to be a good agent, you’ll need to understand your client’s business and its risks. If you’re excited enough, I hope you can read through the remaining portion of this guide so that you can set up your own insurance agency! This HubPage only covers insurance agencies that want to operate and get licensed in the State of California.

If you’ve been working in the industry for a while, it maybe a time to get your own insurance agency up and running. Personal Lines: This allows you to sell, personal lines, or non-commercial insurance products. Mainly the biggest insurance product in this category is the Personal Auto Insurance Policies and Homeowner’s Policy. Fire & Casualty: This license is sort of like an advanced Personal Lines license, where you can sell Personal Lines, AND Commercial insurance. And by doing so, you will need to get an organizational license with the Department of Insurance.

Examples of Commercial insurance products are like commercial auto, business owner’s insurance policy, and professional liability insurance. Life Agent: This license is completely different from the two above, and allows you to sell health and life insurance. With regards to becoming your own boss and operating your own insurance agency, I would recommend you to get both the Fire & Casualty license as well as the Life Agent license. By obtaining both, you become capable of selling auto insurance, commercial insurance, life insurance, and health insurance. There are several schools you can attend to satisfy the educational requirements to take the test with the Department of Insurance. Insurance exams have the rumor to be relatively easy, but that seems to be not the case.

You are able to get an organizational license as long as you or one of your officers has a valid insurance license. Rather than advertising your agency as John Smith, Insurance Agent, you can advertise it as Smith Insurance Services, which does have more credibility to your name. A surety bond is similar to an insurance where the surety bond company may pay a consumer for the any contractual agreement or services that you fail to deliver to your customer. The insurance companies want to see realistic numbers so that it’s worth their time.

One of the biggest obstacles for in starting up an insurance agency is obtaining your errors and omission insurance (E&) for Property and Casualty. An E& insurance protects you, the agent; from any errors or omission that you have performed that caused a significant loss to your clients. Standard policies start at $1 million of liability coverage, and insurance companies that you want to work with will expect you to have that amount of coverage. Since new agents are a huge risk for E& insurance companies, it will be extremely difficult to even obtain a quote with an E& company. On the contrary, it was much easier to obtain an E& Insurance on the Health & Life side of the business.

If you are an established agent with at least a few years of experience, it should be a little easier to get an E& insurance. After a rigorous search, online and through insurance related forums, I was able to find a company called Colony Insurance. After talking to them and persuading them that we will not be a significant risk for the E& Company, I was able to get an E& insurance from them for about $3000 a year. Generally an E& insurance in this side of the industry will cost you approximately $500 a year, and Blue Shield had a great program that I was able to use right away. It is recommended that you start off right away selling health and life insurance to your clients, and with that experience move to the P&C side of business. E& companies in the P&C side will like the fact that you’ve been selling insurance in the past, and they will be more willing to give you a quote for insurance. The following software applies to mostly personal line items, like auto insurance.

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