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How to Start a Car Insurance Business

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Authored by Jayant Row in Insurance, Small Business
Published on 04-10-2009

Auto insurance is a must for every car owner and with the widespread use of automobiles across the country and even all places in the world, auto insurance as a business is never likely to flag. Auto insurance is mandatory and has to be renewed every year. So once you are started on your auto insurance business you can expect recurring business if you provide the good service and look after your clients properly.

So what do you need to start an auto insurance business? You would have to link up with one of the companies that provide this sort of cover. Now these companies have a preference for graduates with a college degree. Nowadays institutions are even offering courses that include insurance, and if you do not have this a degree in Finance, Marketing, Economics, Accountancy, Business Administration and even the Liberal Arts will suit their needs. In addition you need to be familiar with computers and the internet as most companies nowadays operate almost exclusively through this medium, and use the vast range of software that are available for such businesses.

You are also expected to have a license to operate as an auto insurance agent, and each state has its own licensure exams which would allow you to sell property and casual insurance policies. This exam would test your knowledge regarding the fundamentals of insurance and the laws that govern it in that particular state. You can take it a step further and get a CPCU designation. This qualifies you to be a Chartered Property Casualty Underwriter and requires you to get through 10 college level courses and requires you to have an industry experience of at least three years. The ethical standards that this CPCU designation brings with it and the professionalism that it ensures acts as an incentive for insurance companies to give preference to the auto insurance agent who has such qualifications.

So now that you know what you have to do to become an insurance agent, take the first few steps and get into an industry that is growing at rate of 15 percent or more every year. Easily a quarter of auto insurance agents are self employed. As a professional you will help to assess the insurance needs of the driver who is your customer and get him the best policy for him under the circumstances he is in.

You would also need a business license within your city or state in addition to first of course getting the insurance license. And of course purchasing insurance to protect your business and its assets will also show your professionalism. This will protect you from lawsuits, something that has become very vital in today’s business environment. Every insurance company specializes in some area or the other, and similarly you would have to also decide the area you want to concentrate on. Represent as many insurance companies as you can as a customer is always happy when he is given a number of options to choose from. Do your own study on these insurance companies and tie up with those that have the lowest complaints against them for policy redemptions. This way you will also give your own customers the benefit of this study.

Be very clear with each client as to the rebates and discounts that could be possible when he insures with you and explain to them the advantages and disadvantages of each option. See that your record keeping is perfect and you are always in the position to advice your clients well in advance before they need to renew their policies. Keep in touch with them at all times, by e-mail or phone and let them know you will always be around to help them in any problems concerning their auto insurance. There are a lot of requirements to making claims on auto insurance policies and you must always be in a position to advise your clients and customers of these so that claims can be made expeditiously.

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