How to Start Your Own Insurance Company: Hello, this is Chris from Adelphia Insurance. Today, I want to help you understand how to start your own insurance company. When I started my agency, I spent countless hours searching for information and made many mistakes. If I had access to a guide like this, it would have saved me so much time and effort. I’m here to make your journey smoother.
Understanding the Basics
First, let’s clear up a common misconception. An insurance company (or carrier) and an insurance brokerage (or agency) are not the same. An insurance carrier is a company like Liberty Mutual or Progressive that provides insurance policies. If you have an accident, they are the ones who pay out the claims. On the other hand, an insurance agency or brokerage sells these policies to consumers on behalf of the insurance carriers.
Gaining Experience
Before starting any insurance business, it’s crucial to have some experience in the industry. This experience could be in sales, customer service, or handling personal insurance lines. Understanding the business from the ground up is essential for your success.
Getting Licensed
To legally sell insurance, you need to obtain the appropriate licenses. There are different types of licenses for different kinds of insurance, such as life and health insurance or property and casualty insurance. Make sure you are up-to-date with all your renewals and know the specific requirements for your state.
Establishing Contracts
Once you have your licenses, you need to set up appointments with insurance companies. These appointments are essentially contracts that allow you to sell their products and earn commissions. This step can be challenging, but it’s crucial for your business.
Professional Liability Insurance
You should also get a professional liability insurance policy, often called an “errors and omissions” policy. This policy protects you in case you make a mistake with a client’s insurance. It covers you if you forget to include something important or make an error.
Business Entity License
You might need a business entity insurance license, depending on your state’s requirements. For example, my company, Adelphia Insurance Services LLC, holds a business entity license, and I am a producer under that license. Check with your state’s department of insurance to understand what you need.
Patience and Persistence
Starting an insurance agency takes time and patience. The first six months can be especially tough. You might struggle to make sales and understand the business structure. But don’t give up. With persistence, you will find your footing.
Professional Help
If you need help with the legal aspects of starting your business, consider visiting websites like LegalZoom or consulting with a business lawyer. They can help you set up a sole proprietorship, an LLC, or a corporation, ensuring you conduct your business legally.
Conclusion – How to Start Your Own Insurance Company
I hope this guide helps you start your journey in the insurance industry. If you found this helpful, please let me know. Feel free to reach out if you have any questions or need further assistance. I’m here to support you every step of the way.
Thank you for reading, and best of luck with your new insurance business!