Are you very good with people and love assisting them? Are you intrigued by the idea of making a living from your home, using nothing but your phone, your computer, and your own charming personality? Then you should consider setting up a home insurance sales business. You don’t have to be part of a big brokerage or even have connections in the industry in order to start making money. All you need is an insurance license, leads, and an entrepreneurial spirit.
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Selling car insurance needs a property and casualty insurance license. Licenses are state specific with licensing requirements that are maintained by each state’s department of insurance. You need to meet the course-hour requirements, pass an exam and become “appointed” with an insurance company to sell car insurance. Most states have an age requirement of 18 years or older.
State Department of Insurance
Because insurance is operated by state entities, requirements vary from state to state. Check with your state department of insurance or insurance commissioner to know the exact number of pre-licensing education hours needed, the exam basics including duration and scoring and the registration fees for your state. You can pass the exam without being associated with a specific insurance company, although some insurance agencies are willing to pay for licensing requirements. In addition to taking the pre-licensing class and exam, you have to complete an application with the state that includes a background check and fingerprinting and pay any applicable fees for your state.
Pre-licensing course work is carried out either in a classroom setting or online. You must find a preapproved vendor and attend all hours to be qualified for licensing. For example, in California, you need 40 hours of pre-licensing class time and another 12 hours of ethics. If you attend a class in person, you sign in and sign out to demonstrate you were there for that entire duration. If you take an online course, the program monitors your progress. Other states have other requirements. Hawaii needs only 24 hours of coursework plus 12 hours of ethics. The class registrar reports your hours to the department of insurance upon your successful completion of the classes.
Passing the Exam
Every state issues its own exam, and you must meet the minimum requirements. These proctored exams are given at test centers. In California, you pass with a score of 60 percent, while in Hawaii, you must answer at least 75 percent of the answers correctly on the two-hour multiple-choice exam. Prepare for the exam by taking practice exams issued by your pre-licensing provider. Schedule the exam be prepared for a proctored setting. Wear comfortable clothing but avoid hoodies or anything baggy with a lot of pockets. All personal items are left in a locker outside the test room.
Once you have finished the application, background check and pre-licensing process and have passed the exam, you can contact insurance agencies to be “appointed” – a term that means you are allowed to sell their products. Know the type of agent you want to be: A captive agent sells only one company’s product, while a broker sells insurance from many companies. For example, insurance agents who work for State Farm are captive agents and can sell only State Farm products.
If you were previously licensed in another state, ask about reciprocity agreements that allow you to produce across state lines. For example, Hawaii allows California insurance agents to obtain a nonresident license without additional exams or education requirements.
- Pre-licensing educational fee
- License examination fee
- Background verification fee