How to Become a Vehicle Insurance Agent? Journey of Independence

An independent insurance agent represents an agent who is associated with multiple carriers. It means that these agents represent various insurance companies and sell the products and policies to clients on behalf of respective companies/agencies. Likewise, independent insurance agency provides independent agents a wide variety of policies and insurance lines to sell. It could include personal lines (life, health, and auto) or commercial lines (liability, property & casualty). Learn how to become an independent insurance agent in this insurance blog as well as tips to start a successful insurance agency. This blog will also be helpful if you want to learn how to become a vehicle insurance agent.

 

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How to become a vehicle insurance agent?

The benefits you will have if you become an independent insurance agent are:

  • It gives you more room to grow, along with flexibility and independence to choose the products you want to sell.
  • It gives you a sense of confidence when you have various policies for clients to choose from as they can choose the one that fits perfectly with their needs.
  • Independent agents have an additional source of income through commissions, unlike captive agents.
  • Clients tend to seek advice from independent agents relatively more than that from captive agents.

Starting an independent agency can be especially beneficial for local insurance agents who are looking for a change in their careers.

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How to Start an Independent Insurance Agency? 

Initially, you will require money, time, and efforts to open up an agency. However, you will need additional guidance and support so that your agency can run smoothly in the right direction. Here we have two options for you that will help you proceed with your agency with positive outcomes.

Buying a book of business for the insurance agency

You can buy a business book from an already existing agency, which will allow you to run the agency. However, it might cost you a high price from around $250,000 to $500,000 or even more. It will be similar to having a sole proprietorship.

Becoming a vehicle insurance agent

This is a second option for you that will possibly be the better solution to your issues. Agency models assist independent agencies with required support and responsibilities. You can sell insurance while receiving the proper operational assistance your agency needs.

 

Furthermore, you can select one from these two agency models described below:

  • Franchise Model – This model allows you to own your insurance business and grow your book accordingly. You will be associated with an established brand that adds to your company’s goodwill; however, you will owe a high fee to the franchisor. Due to the non-compete clause included in their contract, independent insurance agents will not necessarily get enough room to grow.

  • Insurance FMO Model – This model also provides the same services as the Franchise model, but with more benefits. Usually, they split the commission with their agents on a 70/30 basis. This model’s popularity is increasing with time. Agencies applying this model seem to be showing positive results. 

 

Key Takeaway for Independent Insurance Agency

According to Investopedia, independent agents are similar to independent financial advisors. An independent agency offers a huge potential to grow and succeed. However, it would be best if you chose the right option according to your company’s goals and mission.

Additionally, an independent insurance agency firmly believes that it is also necessary to choose to model that will help your company grow and add value.

With the rise of the FMO model, it might be just the right choice for you, considering its extra benefits. If you want to get the best CRM for independent insurance agents then you can reach out to us for more comprehensive guidance and tips. Furthermore, the insurance industry is rapidly undergoing a digital transformation.

Hence, make sure you invest in a reliable agency management system . Incorporating good insurance software can also allow you to give better service to clients. Having dependable insurance agency management systems can make a huge difference for your agency.

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