How to Become an Independent Insurance Agent in 2022

Last Updated: 21 January, 2022

How to Become an Independent Insurance Agent in 2022

Nobody can be perfect in everything, and sometimes one does not necessarily know everything about a field in which they are interested. If you are one of them and wondering how to become an independent insurance agent in Florida, you have come to the right place to know how to become an independent insurance agent!

An independent insurance agent plays a crucial role in selling insurance policies. Customers seek expertise view and help when it comes to insurance as they have little to no idea about how it works. Hence, advice from an independent agent is crucial to their insurance decisions. Clients wonder if there is an insurance agent near me for guidance. Even Forbes has emphasized an independent agency model for the insurance industry moving forward. Furthermore, as independent insurance agents provide more options than captive agents, clients consider their advice more reliable.

Steps to Start an Independent Insurance Agency 

Starting an insurance business can be tough for new starters. Initially, you will require adequate knowledge about insurance, money, time, and efforts to start an insurance agency. It may seem easy but building a good agency requires a high level of dedication. However, here are two options you can imply as a shortcut to making this process easier.

Book of Business

The first option for you is to buy a book of business from an existing insurance agency. The cost may range from $250,000 to $500,000, or even more depending on its profitability. It is similar to having a sole proprietorship.

Become an Independent Insurance Agent Through an Agency Model

This is the second option. Agency models exist to provide appropriate support and responsibilities. The agency will provide all the operational assistance your agency may require while selling insurance at the same time.

There are two options for these agency models you can consider:

  • Franchise Model

A franchise allows you to own your insurance business and how much you grow your book. It will provide access to insurance carriers along with required operational assistance. You will be associated with an established brand that will add to your company’s goodwill. However, the fees could be high. Due to the non-compete clause included in their contract, they do not necessarily give agents enough room to grow.

  • Insurance FMO Model

You can work under an FMO model which provides much of the same benefits as that of the franchise model. Generally, they split the commission with their agents as of 70/30.

For example, Renegade insurance agency works on the FMO model. It provides one of the best splits with 80/20 for the first year and 50/50 for renewals. They also offer a wide range of insurance products, servicing assistance, and marketing & lead generation support.

To sum up, FMO insurance models provide the same advantages as the franchise model but with a higher freedom level.

Key Takeaway

There are many options from which an agency can choose from, which might be confusing or doubtful. It would be best first to understand how to become an independent agent in Florida and these models' applications well. The model must suit the company’s goals and mission. Furthermore, also focus on insurance marketing for your agency. Effective marketing for insurance can propel your agency to the heights of success. It is revealed through reviews that the FMO model is the best option for the insurance industry. Also, make sure to follow our how to become an independent auto insurance agent for more insights into this.

Frequently Asked Questions

Q. Is it hard to become an independent insurance agent?

It may be challenging, but not impossible, to get clients as a new independent insurance agent. People like family, friends and previous coworkers could be approached. Agents develop a positive reputation by delivering excellent service, which increases their opportunities.

Q. How do I become a successful independent insurance agent?

Follow these five pointers to help you manage your obligations and get a head start as an independent insurance agent.
Set realistic goals for yourself, find a good support system, take calculated risks, create a marketing strategy and stay consistent.

Q. Do independent insurance agents make money?

Independent agents are typically compensated on a commission basis. They make more money the more clients they serve. And as those clients renew their policies year after year, independent brokers continue to earn income. 

how to become an independent insurance agent