How to become an insurance agent

Becoming an insurance agent is regulated, and getting licensed and insured is just the first step to building your career. The process can look different depending on where you live and what type of insurance you want to sell. Read this guide to learn how to become an insurance agent, including licensing, costs, timelines and remote work options.

1. Learn your state’s insurance licensing requirements

Anyone who wants to sell, solicit or negotiate insurance products generally needs an insurance license from their state’s insurance department. And licensing requirements vary by state. Prospective insurance agents also need to hold the correct line of authority for the type of insurance they plan to offer. These might include:

• P&C (property and casualty insurance): Home, auto, renters and commercial policies
• Life insurance and health insurance: Including disability and health plans
• Personal lines of insurance: Personal auto/home only
• Surplus lines of insurance: Specialty insurance (requires additional licensing)

For example, selling life insurance typically requires a life insurance license. Selling business insurance usually falls under a property and casualty (P&C) license. If you plan to sell multiple types of insurance, you may need more than one license. Check your state’s requirements for more licensure details.

2. Complete your pre-licensing education

Before you can take your insurance license exam, most states require you to complete pre-licensing education. While requirements vary by state, generally this coursework introduces core insurance concepts, state regulations and ethical standards you’ll be tested on. 

Pre-licensing education is often available online, in person or through a combination of both. As long as the provider is approved by your state’s insurance department, either option can help you meet the requirement and move on to the licensing exam.

3. Pass the insurance license exam for your state

The insurance license exam is generally manageable if you’ve studied and completed your required pre-licensing education. Exam difficulty can vary by state and license type, but most exams are computer-based and administered at an approved testing center.

Questions are usually in multiple-choice format and will test you on insurance terminology, practical scenarios and basic calculations. You may need to show proof that you’ve completed the pre-licensing course, so remember to bring any necessary documentation.

In many cases, you’ll get your test results soon after taking the exam — often within a few minutes. If you pass, you’ll get instructions on how to apply for a license with the state. You can reschedule the exam if you don’t pass on your first try.

4. Apply for your insurance license and background check

After passing your insurance license exam, the next step is to apply for your license through your state’s insurance department. While insurance licensing requirements differ in every state, most applications require you to:

• Provide proof of exam completion
• Pass a background check or submit fingerprints
• Complete a license application 
• Pay a licensing fee

In general, you must be at least 18 years old to apply, but a college degree is not typically required to become a licensed insurance agent. 

Once your application is reviewed and approved, you’ll be authorized to start selling insurance for the license type(s) you hold.

5. Get business insurance required for insurance agents in your state

Many states require insurance agents to carry errors and omissions insurance, also called E&O insurance. (Note that in some professions this type of coverage can also be called professional liability insurance.) Coverage requirements and limits can vary by state and carrier, so it’s important to confirm your coverage needs.

E&O insurance can help protect insurance agents if a client claims a professional mistake or oversight caused them financial losses. Even when it’s not mandated by the state, many insurance companies require agents to carry E&O coverage before they’ll issue appointments.

Depending on how you establish your business, other business insurance policies could help protect your business. Some of the most common include:

• General liability insurance, which could help protect your business if a non-employee gets hurt at your office or if you or your employees damage someone else’s property by mistake.
• Commercial property insurance if you buy or lease an office or work space.
• Cyber liability insurance — an optional add-on to general liability and E&O — to help protect your business if sensitive digital data such as client financial data, health information or contact information becomes compromised.
• And if you have employees, most states require workers’ compensation insurance to help cover medical costs and lost wages if an employee suffers a work-related illness or injury.

6. Get appointed as an insurance agent (with no experience)

Before you can sell an insurance company’s products, you need to become appointed by the insurance company, meaning that you’re legally authorized to sell an insurer’s products. You’ll need to apply for an appointment with each carrier you want to sell products for.

When you’re starting out as a new agent, getting carrier appointments can be difficult — especially at larger insurance companies — since you don’t have a proven track record of trust and reliability.

To help you get your first appointment, try working with smaller insurance companies or carriers with a track record of working with new agencies. ERGO NEXT Insurance allows appointed agents to quote and bind online for hundreds of professions. We offer instant online quotes for all policies with no underwriting delays. Plus, we issue same-day logins for some sole proprietors and independent agents. Learn more and join ERGO NEXT as an appointed agent.

Many insurers and agencies offer training to help new agents learn products, sales processes and compliance.

7. Maintain and renew your insurance license

Insurance agent license renewal requirements depend on your state. Most states want you to renew every two years, but some might ask you to do it every year or every three years.

Stay on top of your license expiration date so you don’t let your credentials lapse. You can usually start the renewal process 60-90 days before your license expires.

Many states also require licensed insurance agents to complete continuing education (CE) as part of their license renewal. Tools like the National Insurance Producer Registry (NIPR) Licensing Center can help you manage renewals and confirm state-specific requirements when renewing or updating your license.

How long does it take to get an insurance agent license?

Many states use the National Association of Insurance Commissioners’ (NAIC) State Based Systems for insurance licensing and other regulatory purposes.

The time it takes to get your insurance license depends on your state and the type of insurance you plan to sell.

• Many states require between 20–40 hours of pre-licensing education, which is often available online and can be completed on a flexible schedule.
• Then you take the relevant exam. Typically, you can either take your test in person at a testing center or remotely online.
• After you pass the test, complete a license application and submit to a background check if it’s required.

Application review times vary by state, but many applicants receive word within a few weeks. 

How much does it cost to become a licensed insurance agent?

The cost to become an insurance agent can vary by state and license type, but many agents spend a few hundred to a few thousand dollars to get started.

Expenses often include:

• Pre-licensing education and exam fees. Many states require pre-licensing courses which may have tuition costs, plus separate fees to take the licensing exam.
• State license application and renewal fees. After passing the exam, you’ll pay a state licensing fee which can range from about $50 to $300 per license. Ongoing costs may include renewal fees and continuing education requirements.
• Insurance coverage costs for insurance agents. Insurance agents are often required to carry errors and omissions insurance (E&O insurance) to help protect against claims related to professional mistakes or oversights. Other common business insurance costs for insurance agents include general liability coverage for non-employee injuries and damage to other people’s property, commercial property insurance if you set up your own business and workers’ comp insurance — a requirement if you have employees.
• Other startup and operating costs. Additional expenses can include technology and software, furniture, data security, marketing, business registration fees and basic office or home-office setup expenses.

How to sell insurance from home or remotely

Many insurance agents work remotely, especially independent agents who run their own agencies. As long as you’re properly licensed in the states where you sell insurance and follow carrier and regulatory requirements, selling insurance from a home office is possible.

Some states and carriers may have specific compliance or recordkeeping rules for independent insurance agents, so it’s important to know these rules and follow them to remain compliant.

If you plan to sell insurance from home, you’ll generally choose between becoming a captive agent or an independent agent.

• Captive agents represent a single insurance company. They often benefit from training, company support and a more predictable income. In exchange, they’re usually limited to selling one carrier’s products and may need to meet sales quotas or follow contractual restrictions.
• Independent agents work with multiple insurance providers. They can offer clients a wider range of coverage options. While this model provides more flexibility, independent agents may need to take a more hands-on approach to training and technology, especially when they’re just starting out.

How ERGO NEXT helps insurance agents start and grow their business

ERGO NEXT has tailored business insurance coverage for insurance agents, including errors and omissions insurance.

We’ll ask a few questions about your business and give you a quote. You can select your coverage options and buy your policy in about 10 minutes. Share your certificate of insurance at no extra cost, and you can access your policy 24/7 via web or mobile app.

If you have questions, our licensed, U.S.-based insurance professionals are available to help.

Start a free quote with ERGO NEXT.