How Much Do Auto Insurance Agents Make per Policy?
Last Updated on May 8, 2020
Car insurance agents help their customers find the right coverage for their needs. They also help customers file claims and answer their insurance-related questions. You may be wondering how car insurance agents are compensated for their time, or more specifically, how much they get paid for each policy they sell. Here’s what you need to know about car insurance agents and how they get paid.
How Are Car Insurance Agents Paid?
There are two different types of car insurance agents – captive agents, who work for one specific car insurance company, and independent agents, who sell products from several different companies. Most car insurance agents get paid by commission, which means they get a fraction of each car insurance policy they sell. Independent agents typically work entirely on commission, while captive agents may receive a salary in addition to their commission.
When shopping for insurance, it’s important to remember that car insurance agents are motivated by commission and often have sales quotas that they need to hit. There are many agents that have your best interests at heart and are looking to help you find the right policy for your needs. However, many agents will try to upsell you on your policy by encouraging you to add on a number of extra coverage types. While there are benefits to purchasing additional coverage for your car, you don’t want to overpay for coverage you won’t use. When purchasing a policy, it’s important to research your options on your own, before making a final purchase with your insurance agent.
How Much Do Car Insurance Agents Make?
The amount that car insurance agents make varies from state to state. The amount that agents are paid is in direct proportion to the cost of the products they are selling. Therefore, an agent who practices in a state with expensive policies, like Michigan or Florida, could make slightly more than an agent in Alaska or North Dakota, where policies are statistically much less expensive. Agents working in large cities generally make more than those in suburban or rural areas. This is partially due to the higher cost of living in large cities.
When insurance agents sell a policy, they receive a percentage of the policy as a commission. These commissions are usually between 15 and 20 percent, although they can be higher or lower depending on the business and the agent’s level of experience. This means that if you pay $1000 per year for car insurance, your agent will receive $150 to $200 for that policy.
The average salary of an insurance agent can vary widely. Insurance agents who receive a regular salary in addition to the commission will generally make more overall and have more financial stability. Those who receive an hourly salary average around $10 to $18 per hour with commissions on top of that. The average yearly salary for a car insurance agent is approximately $48,000 per year. Entry-level agents may only make $20,000 per year, while the most experienced insurance agents may make as much as $100,000 per year.
What Are the Requirements for Becoming a Car Insurance Agent?
You may be wondering how car insurance agents get started with their careers. In order to sell car insurance, you will first need to get an insurance license. Many people prefer to get an associate’s or a bachelor’s degree before starting their career in insurance, but it is not required. The licensing requirement to become an insurance agent varies from state to state. You will need to take courses in your insurance specialty, and typically there will be a certain number of course hours you will need to meet.
Once you have taken the requisite courses in car insurance, you can take the licensing exam. You may also be required to pay fees to obtain your license. After obtaining a license, agents can apply for positions with insurance companies or independent insurance agencies. They can also start their own insurance agencies and partner with a range of insurance companies, a popular option for those in rural areas that may not have car insurance agencies already.
Most states have continuing education requirements to maintain an insurance license. This includes requirements for education hours that cover changes in the state’s insurance codes and best practices. Agents need to be aware of their state’s continuing education requirements in order to maintain their license.
How Can I Find the Best Car Insurance Policy for My Needs?
The best way to find a good car insurance policy is to get quotes from several different agencies. You can get quotes directly online from many companies, or you can go through an insurance agent. There are advantages and disadvantages to both approaches – the one you choose will depend on your personal preference.
If you work with a captive insurance agent, they can give you an in-depth look at all of the insurance products that their company offers. This can help you get a better idea of the discounts they offer and which of their coverage options make the most sense for your needs. An independent insurance agent may not have the same in-depth familiarity with the products they offer, but they can show you a wider variety of products that may be a good fit for you. They are also very connected in the insurance industry, so they can help you find policies and discounts from insurance companies that you may not have been able to find on your own.
Insurance agents serve a very important purpose in the auto industry. A reliable insurance policy is a must-have for every driver, as you never know exactly what’s going to happen when you’re out on the road. Insurance agents use their extensive familiarity with the industry to help their clients find reliable and affordable policies for their vehicles.
