How do I open a Auto Insurance Agency in TX?
I have been doing auto insurance for around 5 years and I am ready to venture out on my own. I have my lic. already and know who is and is not going to let me write for them. Where do I go from here? I know I need a E & O policy, and a bussines bank account for my premiums to be swept daily and a DBA as well as a tax id. Is there anything else I am missing or need to do?
- Margarita DLv 61 decade agoFavorite Answer
You will also need a Certificate of Occupancy for your office space & in some states they also require that you obtain a Basic Business License & that you obtain a state tax registration number for use in filing Property Taxes, Annual Reports, etc. You will also need to obtain a Federal Identification Number to be able to open a bank account (and depending on the state requirements you might have to open two bank accounts--one for Premium/Escrow funds where you keep clients monies and the second one for your operating funds), report unemployment tax, pay Federal withholding taxes, etc.
Even though you have your companies lined up, I suggest that you start on a Business Plan including a Marketing Plan, Mission Statement, SWOT analysis, etc. Once you have this done you can approach the companies & convince them that you will be able to successfully & profitably market & sell their policies.
Also FYI starting a "scratch" agency is not easy. Be prepared for 60 to 70 hour work weeks, cold calling, etc. One more point, in my opinion it is better for you to have an independent agency than obtain a contract with an exclusive company. In the current financial market I would not one to put all my "eggs" in one basket by representing only one company--apart from the fact that with some exclusive companies they actually own your "book of business" (the client roster) not you. Essentially that means that they can terminate your contract & keep all the clients that you developed!
When I first started my business, I dropped off flyers in Church parking lots during services, at parking lots for grocery stores, home improvement stores, etc. I also did volunteer work with a lot of the advocacy programs here & since people met me & saw me as someone willing to sincerely help people I got a good reputation & they would send me clients. I dropped off flyers & business cards & spoke with the owners of all the local businesses. I also dropped off specialized flyers that are made so that they can hang off a doorknob in neighborhoods that I wanted to do business, etc.
Also join whatever networking groups you can. I am in the Mid-Atlantic Region and here we have a group called BNI (Business Networking International) only one person from each industry can be represented in the group (i.e. home improvement contractor, commercial real estate agent, residential real estate agent, mortgage broker, banker, accountant, one property casualty insurance agent, life agent, group benefits agent, commercial furniture sales person, printer, computer person, etc.). The group meets on a weekly basis to get to know each other, know each others businesses & give each other referrals. Look up BNI on the Internet, but if you don't have this type of group, I suggest you start one. This is a wonderful way to get real referrals not just leads & also make excellent business & social contacts. Also check into other business groups for networking such as your local chambers of commerce, etc. Do not waste too much money on advertising since it does not work as well as actual networking & other methods.
Treat each of your clients as if he or she is that million-dollar account. If you do a good job with a client, he/she will remember & send you 2 or 3 others. If you do a bad job with a client, he/she will not only fire you but they will speak badly about you to 10 people! Reputation is everything in our business. Also institute a referral program--a good one is to offer a $10 gas card for each qualified referral that a client sends your way! I know that this program works because it gets the phone ringing & will result in many sales. Also make sure you keep your commitments, i.e. if you say you will follow up on something do it. When you first meet with a prospect use a portfolio type book with a list of recently sold successful deals (for example list ABC Co. reviewed their insurance resolved a gap in coverage & saved them $500 a year), referral letters from clients that were satisfied, information on types of products you sell, financial standing of the company/ies you represent, brochures, etc. Try as much as possible to under promise and over deliver.
Over time you will find that cold calling gets much easier--it is just a numbers game. Look at it as an adventure. You are getting to meet new people--some of whom will be become clients and even friends. You are offering them not only a valuable service but a relationship with someone who is unique--you!
After a while most of your clients will come from referrals but never stop doing your best & thanking your clients for each one of the referrals they give you. Remember that if you give great service there is never truly any competition. As soon as possible sign up for the Agency Management Workshop in the CIC program as this will give you invaluable tips and resources. Good Luck!Source(s): Certified Insurance Counselor, Licensed Insurance Agent & Broker for over 29 years.
- Anonymous5 years ago
To be an AGENCY underwriter, you'll have to be licensed to sell insurance. It doesn't pay much, if you don't have any experience! But pay your fee, take the test & pass it, then send out your resume. You'll likely start out as a "csr" - customer service representative. They do the new business underwriting.
- 1 decade ago
Contact the department in your state that licenses this type of business.
- AnonymousLv 71 decade ago
OK, do you have any CONTRACTS set up yet? YOu need the contract first.