Easy Ways to Be An Independent Insurance Agent in 2026

TLTR: This article provides an in-depth analysis of what independent insurance agents are and focuses on the benefits of being one. It also explains the process involved in transitioning into becoming an independent insurance agent.

As IBISWorld explains, there are currently 412,850 Insurance brokers and agency businesses in the U.S. If you’re reading this, chances are that you’re interested in entering the industry yourself.

Feeling confused and overwhelmed about what your first step should be? That’s completely normal. Insurance as a whole can be confusing. But with proper guidance and know-how, you can be every bit the insurance agent that you think you’re capable of becoming.

Let’s start with the basics!

What Is an Insurance Agent?

Customers usually have little to no idea regarding what type of insurance they should purchase. An insurance agent is a professional whose primary goal is to help clients acquire the right insurance policy that meets their needs.

While they help their clients select the right insurance policies, they represent the insurance companies during the process. There are primarily two types of insurance agents: captive and independent.

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What Is a Captive Agent?

As the name implies, captive agents can only represent and sell products from one insurance company. For example, companies such as State Farm, Allstate, and Geico sell their policies exclusively through their captive agents. Agents are regarded as employees of the company and are provided with office space, training, and administrative support.

Captive agents can only sell products and services offered by their carrier. For example, if the carrier only sells business lines, the captive agent cannot sell any personal lines of insurance.

Furthermore, while they can mention them, they are not allowed to sell insurance policies provided by other carriers even if those policies provide better coverage at a cheaper rate.

What Is an Independent Insurance Agent?

Independent insurance agents or insurance sales agents are the opposite of captive agents. This means that they can represent multiple carriers and are not bound to just selling the products from a single entity. They act as middlemen between insurance buyers and insurance sellers to facilitate a transaction.

They approach different insurance companies to “appoint” them and work on legal contracts called “appointments.” This contract specifies the policies they can sell and the rate of their compensation.

Insurance companies such as Nationwide, Safeco, and Travelers all write insurance through independent insurance agents.

Unlike captive agents, independent agents receive commissions from the policies they sell and are not considered employees of any specific insurance company.

Some of the responsibilities of an independent insurance agent are:

• Sell policies from multiple insurance companies.
• Pitch their clients on policies from competing companies to find the one best suited for them.
• Assist their clients in completing their applications.
• Bind coverage
• Solicit new business

How Much Does an Independent Insurance Agent Make?

According to ZipRecruiter, the average annual pay for an Independent Insurance Sales Agent in the United States is $72,458 a year as of August 2024.

Independent agents get paid by the insurance company whose products they sell on a commission basis. They earn a certain percentage of the commission every time they sell an insurance policy and when their clients renew those policies.

According to the Bureau of Labor Statistics, the upper 10% of insurance agents earn $125,000 annually, and the bottom 10% earn around $25,000.

Agents selling property and casualty insurance can earn commissions from the sales of several lines of policies. P&C insurance encompasses several categories:

• Business liability
• Personal auto policy
• Commercial auto insurance
• Boat insurance
• Homeowners insurance
• Pet insurance

As a P&C agent, you can either choose to sell one specific type of policy or specialize in selling multiple types of policies to a broad spectrum of clients.

An agent who sells homeowners insurance and car insurance can expect to earn commissions from both the premiums as well as a portion of the policy renewal. This means that the chances of increasing your earnings improve with the growth of your client network.

Similarly, agents who sell life and health policies earn upfront commissions from their companies, albeit at lower commission rates on renewals.

Independent insurance agents are also offered rewards and bonuses by insurance companies if they meet their sales targets.

How To Become an Independent Insurance Agent?

To start a career as an insurance agent, these are the steps that you need to follow to get an insurance agent license.

Decide what type of insurance agent you want to be

The first thing you need to decide is whether you want to become a captive agent or an independent insurance agent. Both career paths have their pros and cons. So, you’ll need to spend some time doing a little research before setting off on your journey.

Decide what type of insurance product you want to sell

Decide on whether you want to sell commercial insurance or personal insurance. Agents specializing in personal lines of insurance focus on providing coverage for individuals and families. Their coverage options include motor vehicles, homeowners insurance, and life insurance.

Commercial insurance agents provide coverage to commercial businesses with policies ranging from general liability insurance and commercial property insurance to errors and omissions insurance.

It’s vital to base your decision on what line of insurance you’d be comfortable selling. Decide based on your gut instinct and your academic background.

Review your state’s licensing requirements

Based on the line of insurance you’ve chosen to go with, you’ll need to assess the licensing requirements of the state that you’re planning on operating in. Each state has its own custom requirements and you need to be aware of them before taking your next step.

Some states will also require you to attend a 20-hour pre-licensing course in a classroom or through online platforms before sitting for an exam.

Your career plan could require you to obtain multiple licenses. So, it’s advisable that you get the specifics from your state’s licensing department or the companies you plan on representing.

Note: Individuals who operate without a license can face penalties or legal actions.

Take the insurance exam

Once you’ve fulfilled any pre-exam licensing requirements for your state, you’ll need to register for your official licensing examination. This exam is held at a testing site where you’ll be placed at a computer. The date and time will be scheduled beforehand and the test usually lasts for two to three hours.

Note: You may need to show proof that you’ve completed the required pre-licensing classes, so remember to take all the necessary documents with you.

As with any subject, the level of difficulty will depend on how prepared you are. You should have a relatively smooth experience if you’ve completed your pre-exam requirements. The question format is typically multiple-choice and will test your knowledge on insurance terminologies, numbers, and practicality-based scenarios.

You’ll need a score of over 70 to pass the exam, and you’ll find out if you’ve passed or failed the test immediately after you’ve submitted the paper. You can reschedule the exam if you fail on your first try. Learn more on insurance license cost by state.

Submit the required documents and complete the background check

Once you’ve passed your state licensing exam, you’ll need to submit all the necessary documents to your state licensing department. Some states also require background checks and your fingerprints.

Once you have acquired your license, you can finally legally discuss and sell insurance.

Get Appointed with insurance companies

As an independent insurance agent, you’ll first need to be appointed by the company if you want to sell their insurance products. To do so, you’ll need to complete an application with each insurance company that you want to work with.

Only once you’ve been granted an appointment and binding authority are you legally allowed to sell their insurance products.

Find and build up your client base

An agent is only as good as their client base. So, it’s your responsibility to build up your clients and transition prospects into loyal clients. Many independent insurance agents start their career by prospecting their friends and family. Starting your career as a local independent insurance agent is a great way to garner some valuable practical experience in the industry.

So, sell insurance to people in your immediate social circle to get a feel for the process. It’s also vital to understand customer behavior and leverage your learnings into practice.

With the advances in technology over the past few decades, you should also know how to sell insurance online if you’re to capture a broader market.

Make sure that your business is protected

Being an insurance agent is a profession in itself. So, you’ll want to make sure that your agency or business is well protected with commercial insurance. Some of the most essential insurance coverage to consider getting for your business is:

• General liability insurance will provide you with coverage for a wide variety of situations. For example, if one of your clients trips on a table and injures himself while in your office. This coverage can be bundled with commercial property insurance in a business owners policy.
• Errors and omissions coverage is something that every insurance company needs before they’re allowed to write policies. It protects insurance buyers against any form of error that you or your staff may make.
• Workers compensation insurance will pay off any claims that one of your employees makes against the company. For example, if one of your staff trips on a carpet and ends up spilling hot coffee all over herself, this coverage will pay a portion of her lost wages and medical expenses. This coverage is mandated in almost all states and will need to be implemented even if you only employ people who work part-time.

Let us help you become the independent insurance agent that we know you’re capable of becoming!

What Are the Advantages of Being an Independent Insurance Agent?

As an independent insurance agent, you enjoy some advantages such as:

Freedom & Flexibility

An independent insurance agent is their own boss. They have the freedom to make all their important management decisions. Independent insurance agents have the freedom to operate in a manner they feel comfortable with.

Being an independent agent, you’re not limited to selling insurance policies from just one insurance company. Since you can offer your clients different products and services from multiple carriers, you can customize your marketing approach.

Independent insurance agents can also choose to work on the fly by setting meetings with their clients in cafés and restaurants. This not only helps save them time, but it can also make their clients feel more comfortable. If their clients would prefer to meet with them at their home or at their office, that could be managed as well.

Variety of Options

Independent agents are not limited to selling insurance policies from just one insurance company. So, you can offer multiple lines of insurance to your clients. All these options also mean that you don’t have to be adamant about advising your client on buying from a specific carrier.

Offering a list of options for your clients to choose from can also establish a sense of trust. It can also help in client retention and referrals.

In-depth Industry Awareness

Independent agents work closely with multiple insurance companies, so they regularly receive valuable information. This makes them knowledgeable on rates of premiums, in-depth coverage details, discounts, add-ons, and additional costs.

When clients see that you’re an industry expert who knows what they’re doing, it can help establish you as a stand-out professional in the long run.

Can Focus Solely on Sales

As an independent agent, you can focus solely on sales and let an insurance agency handle all the back-end administrative tasks. By opting to do so, you can exponentially grow your book of business.

Since you aren’t tied to the offerings of just one company, you can choose the agency you want to work with. Furthermore, advances in insurance software have made it very easy for agents to manage all their administrative tasks entirely in the digital realm.

Teachable Takeaway: How to Sell Insurance as an Independent Agent?

Build Relationships: Understand clients’ needs and offer personalized solutions.

Offer Choices: Provide a variety of insurance options from different companies.

Develop Your Brand: Network, use social media, and get involved in the community to build trust.

Stay Informed: Keep up with the latest insurance products and market trends.

Educate Clients: Help clients understand their options and make informed decisions.