How to Become an Auto Insurance Agent

Last Updated on August 6, 2021

Becoming an auto insurance agent may be easier than you think. In most states, you need a license to sell auto insurance. Some states also require you to take a test.

Are you interested in selling car insurance? Do you want to become an auto insurance agent? With a few basic steps, you can become an auto insurance agent.

Keep reading to discover everything you need to know about becoming an auto insurance agent in your state.

How to Become an Auto Insurance Agent

To become an engineer, you need an engineering degree. To become a doctor, you need a medical degree. To become an insurance agent, however, you can come from a range of different educational backgrounds.

The average auto insurance agent does not have a bachelor’s degree. Most have a high school degree or equivalent.

Some insurance firms require agents to have a bachelor’s degree. Other insurance firms, however, only require experience. Some require no experience whatsoever and are willing to train the right candidate. Other firms prefer candidates with higher levels of education but are willing to hire anyone driven to become a good insurance agent.

how to become and auto insurance agent

The best way to become an auto insurance agent is to obtain a license in your state and then apply for jobs nearby. You must obtain a property and casualty insurance license to sell auto insurance in most states. Once you are licensed, you can apply for auto insurance agent positions near you.

Do I Need a License to Be an Auto Insurance Agent?

Most states in America require auto insurance agents to have a license. In fact, most states require you to have a license when selling any type of insurance.

If you want to sell multiple types of insurance, then you need multiple licenses. If you want to sell life and health insurance, for example, then you need one license. If you want to sell property and casualty insurance (including auto insurance), then you need a separate license.

Most states require you to complete a specific course to receive a license. You may need to take one or more classes, study, and pass a test before receiving your license.

How to Become an Auto Insurance Agent in Your State

States have different requirements for auto insurance agents. Generally, however, you pass a test to receive your license, then apply for auto insurance jobs in your state.

Here’s how the process works in most states:

Step 1) Check Property & Casualty License Requirements: If you want to sell auto insurance, then you need to obtain a property and casualty (P&C) license from your state’s Department of Insurance. If you want to sell life and health insurance, then you need to also obtain a life and health (L&H) insurance license. Once you have a property and casualty insurance license, you can sell auto, home, business, and other types of property and casualty insurance policies in your state. Most insurance agents get both P&C and L&H licenses, although many auto insurance agents only carry P&C licenses.

Step 2) Complete a Background Check and Identity Verification: Most states require auto insurance agents to complete fingerprinting and a background check prior to receiving a license. You must schedule to have your fingerprints taken before the license exam. Most states require you to pay fees of $20 to $100 to complete the background check and biometric verification.

Step 3) Complete Pre-License Education: After you’ve determined which licenses you need in your state, you can now complete your pre-license education. In California, auto insurance agents must complete 20 hours of pre-license education, which includes 12 hours of education in ethics and California’s insurance code. After completing the pre-license course, you will receive a certificate.

Step 4) Complete the Insurance License Exam: You’ve completed the training and received your education certificate. Now, you need to complete the insurance license exam. You must take one exam for each line of insurance you wish to carry. If you wish to sell auto insurance, then you only need to complete the P&C insurance license exam. In California, you must pay around $120 for the exam (including the cost of the exam plus a convenience fee). You have 195 minutes to complete the exam, which has 150 questions.

Step 5) Complete the License Application: After you have passed the test, completed your training, and finished the background check, you can apply for a property and casualty insurance agent license in your state. The state’s department of insurance (or equivalent authority) will review your application, then approve it.

In most states, this entire process takes 2 to 6 weeks. However, depending on your schedule, exam timing, and other factors, it could take longer. The total cost for the training, background check, and exam will be $300 to $600, depending on your state.

That’s it! After completing these steps, you are officially licensed as an insurance agent in your state. You can now legally sell auto insurance policies. Start applying for auto insurance jobs in your area.

Education Requirements for Auto Insurance Agents

Some states require auto insurance agents to have a bachelor’s degree or associate’s degree to have a license.

Most states, however, have no formal education requirements. As long as you can pass an exam on insurance laws in the state, you can receive a license to become an insurance agent.

Don’t have a bachelor’s degree? That’s okay! According to the Bureau of Labor Statistics, the typical entry-level education for an insurance sales agent is a high school diploma or equivalent.

The BLS also reports that insurance sales agents receive moderate-term on-the-job training. In other words, a significant amount of your training will occur as you work – not in a classroom.

How Much Do Auto Insurance Agents Make?

According to the United States Bureau of Labor Statistics, the median pay for insurance sales agents is around $52,180 per year ($25.08 per hour).

BLS data also shows that the job outlook for auto insurance sales agents is better than average. Between 2019 and 2029, the market is expected to grow around 5%, which is faster than average. There were over 501,300 insurance sales jobs in 2019, and that number is expected to grow by 27,500 over the next decade.

Other Auto Insurance Agent Certifications and Licenses

You must have a license to become an auto insurance agent in most states. After receiving that license, however, you may wish to pursue other certifications, specializations, and licenses.

Many companies have in-house certification and specialization systems. Your insurance company may offer courses to specialize in a specific area of auto insurance law, for example.

However you wish to specialize in auto insurance, you can expect to receive considerable on-the-job training. Most auto insurance agents shadow another agent, for example, to learn the basics. As you continue to gain experience, you can become more independent.

Other Skills for Auto Insurance Agents

Auto insurance agents come from diverse backgrounds and have diverse skill sets. Some skills that may be important for auto insurance agents, however, include:

Analytical Skills: As an auto insurance agent, you must analyze the needs of each client, then determine the best insurance products for those unique needs.

Communication Skills: Verbal and written communication skills are important in any job, but they’re particularly valuable in the auto insurance world. As an auto insurance sales agent, you must be able to communicate the benefits of insurance products to customers. You must also respond to their requests, questions, and complaints. Good communication skills will help you succeed as an auto insurance sales agent.

Self Confidence: Auto insurance sales agents must sell auto insurance policies to prospective customers. Self-confidence is crucial for any sales position, including auto insurance sales.

Self Motivation: The more people you contact, the more auto insurance policies you can sell, and the more commissions you’ll earn. Auto insurance agents must have the initiative to reach out to prospective clients and continue growing their customer base. By having the self-motivation to reach out to prospective customers, you can maintain a strong flow of commissions.

Final Word on Becoming an Auto Insurance Agent

Auto insurance sales can be lucrative. Most auto insurance agents have a high school degree or equivalent. In fact, you can become a licensed auto insurance agent in your state within just two to three weeks.

Obtain a property and casualty insurance license in your state, then start to apply for auto insurance agent jobs nearby.

James Shaffer
James Shaffer James Shaffer is a writer for InsurancePanda.com and a well-seasoned auto insurance industry veteran. He has a deep knowledge of insurance rules and regulations and is passionate about helping drivers save money on auto insurance. He is responsible for researching and writing about anything auto insurance-related. He holds a bachelor's degree from Bentley University and his work has been quoted by NBC News, CNN, and The Washington Post.
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