How much do insurance agents make?

If you’re considering a career in insurance, the first question you’re likely to ask is, “How much do insurance agents make?” The short answer is more than you think.

Insurance is a sales business; therefore, insurance agents are also sales representatives. In the world of sales, the income potential can be very high. In this article, we highlight how much property and casualty insurance agents can make annually and how they can increase their income potential long-term. 

How much do agents make annually?

According to ZipRecruiter, property and casualty insurance agents make an average salary of $89,000 per year or about $43 dollars per hour. That’s some serious dough. But that’s the average; if you’re a freshly licensed insurance agent working for a local agency or a national carrier, you may see a starting salary of $40,000 to $50,000 annually. 

Long-term agents can make up to six figures, with about 10% of agents making up to $200,000. These agents typically have several years of experience and have established a strong client base. Agents that work in commercial lines usually see the best income potential. 

How do agents make money?

An insurance agent’s salary is usually made up of base pay plus commissions on the policies they sell. Commission rates paid to the agent usually run between 10% to 15% of the premium of policies sold and 10% to 12% of the policy renewal premium. Captive Agents may see a lower overall commission rate since they’re selling on behalf of only one carrier, while Independent Agents may receive higher commissions as they have more options for the buyer, which is the policyholder. 

Agents in more densely populated areas, or areas where insurance premiums are higher, may see better sales and commission opportunities. This is due to better sales opportunities or higher-value commercial and residential properties. If you become an Independent Agent, we recommend gaining additional state licenses through reciprocity so you can increase your sales reach and income potential. 

How can I increase my starting salary?

So you’re interested in making more out of the gate? A few things can contribute to a higher starting salary. If you have a background in sales, a Bachelor’s degree, or existing insurance designations, that can help you sell yourself as deserving of a higher starting rate. 

Previous experience or licenses selling health insurance can also position you to make more than the entry-level rate. Some agents start out as customer service representatives or marketing representatives before they make the shift to becoming an agent. Any previous insurance experience will better position you for a higher-paying salary. 

How to get started

It’s rather easy to become an insurance agent, and you do not need prior experience to jump into this lucrative industry. Nor do you need a college degree. We encourage you to check out our article: How to Become An Insurance Agent in Five Easy Steps, for a more in-depth look at how to get started. 

If you’re in Alabama, Arizona, Florida, Georgia, Nevada, South Carolina, Tennessee, or Texas, we have insurance licensing courses that will help you pass the required state exams. We’re hard at work on developing courses for additional states as well. 

In short, you want to decide what type of agent you want to become (captive or independent), study for the exam through All-Lines Training, and start applying for positions! It’s really that simple, and once you get in the door, you’re part of an industry that offers long-term growth and upward mobility. If you have any questions about licensing or our courses, reach out to us. We’re here to help.