How to start a car insurance company

Written by nicki howell
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According to the Bureau of Labor Statistics, the auto insurance business is expected to grow 16% by 2016. Approximately 26% of auto insurance agents are self-employed. These professionals evaluate driver's insurance needs and select the best policy for their situation. But before launching your car insurance company, it's important to get licensed with your state and determine what types of auto insurance policies you want to sell. Here's a guide to starting a car insurance company.

Skill level:
Moderate

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Instructions

  1. 1

    Get an insurance license with your state. Most states require those selling auto insurance to attend a prelicensing course and to take a state exam. To find out if your state has this requirement, contact your state department of insurance.

  2. 2

    Apply for a business license. Before selling your first auto insurance policy, you need to obtain a business license with you city. This can be secured by requesting an application from the city business office; typically located at the city hall department.

  3. 3

    Purchase insurance to protect your business. This will protect your assets in case of a disaster or accident and also protect your company against losses resulting from lawsuits. Contact your state department of insurance for a list of companies that provide this service.

  4. 4

    Select which car insurance policies you will sell. Large insurance companies such as Progressive Insurance allow independent insurance agents to sell policies on their behalf. The more insurance companies you have under one roof the better. This will allow you to provide your customers with more options and the best rates on insurance.

  5. 5

    Market your services to potential clients. If you were a car insurance agent before launching your own company, contact each of your clients and provide them with your new contact information. Before calling them, have a few ideas about how to save them money by switching. Also, make a list of family, friends, associates and acquaintances and contact each individually to discuss auto insurance policies.

Tips and warnings

  • Get active in your community. In the beginning, the majority of your time should be spent networking and talking about your services. Attend community events, join your local chamber of commerce and find unique ways to talk about your services.
  • Consider working for an insurance agency before starting your own business. Getting on-the-job experience before opening your own agency will provide insight into dealing with customer and claims issues. Plus, you'll develop a client base that will help launch your new business.

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