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Step-By-Step Guide For Starting An Insurance Agency

step by step guide

Starting an insurance agency can be a very profitable business venture. There are some important steps that must be taken in order to ensure success. This step-by-step guide will provide you with all the information you need to get your business up and running.

Here are the steps you can take to get started on building your very own insurance agency.


10 Steps to Launching a New Insurance Agency

1. Choose Your Type of Insurance Agency

The first step in launching an insurance agency is to identify the type of insurance agency you want to launch. You might choose from the following types among others:

  • Traditional insurance agency
  • Captive insurance agency
  • Independent insurance agency

Learn more about the types of insurance agencies.


2. Name Your Insurance Agency

Give your insurance agency an identity so people will think of it as a well-known and respected brand. You can take the name of your insurance agency from your industry, focus on a geographical location, or use your own name among other options.

The main goal for naming your insurance agency is to make it sound appealing and trustworthy so that potential customers will want to do business with you. 


3. Determine Your Insurance Agency Business Model

There are several possible types of business models for an insurance agency including:

  • Online insurance agency
  • Brick-and-mortar insurance agency
  • Mobile insurance agency
  • Direct seller insurance agency
  • Captive agent insurance agency 

No matter which model you choose, make sure that it aligns with your business goals and the products and services you offer.

Read more about choosing the right business model for your insurance agency.


4. Choose a Legal Form for Your Business

By incorporating your insurance agency, you will limit your liability. You can incorporate as a Limited Liability Company (LLC), a C Corporation (C-Corp), or an S Corporation (S-Corp). Or you can operate as a sole proprietorship.

The business structure you choose for your insurance agency will determine the amount of taxes you pay and which state or federal tax forms you need to file.

Read our article comparing the most common insurance agency business structures.


5. Write an Insurance Agency Business Plan

All insurance agency business owners should develop a business plan. 

A business plan is a document that outlines the goals, strategies, and operations of a business. It can be used to secure funding from investors or lenders, as well as to guide the day-to-day operations of the business. The business plan should include information on the company’s products or services, market analysis, financial projections, and management team among other things.

When developing your insurance agency business plan and strategy, you should think about the following questions your customers might have:

  1. What services does your insurance agency offer?
  2. What is the process for filing a claim?
  3. How can I lower my premiums?
  4. How often should I review my policy?
  5. Can I cancel my policy at any time?
  6. Are there any discounts available?
  7. When does my policy renew?
  8. How do I make a payment?
  9. What is your customer service number?
  10. Do you have an app?
  11. What is the process for renewing my policy?
  12. What is the process for changing my coverage?
  13. Can I add or remove a driver from my policy?
  14. How do I get a quote?
  15. How long does it take for a policy to go into effect?
  16. How do I file a claim?
  17. How do I know if I have enough coverage?
  18. What is the difference between comprehensive and collision coverage?
  19. What is an insurance deductible?

Answering these types of questions will help you develop a business plan and strategy that meets the needs of your target customers.

Read our article about how to write an insurance agency business plan.


6. Apply for the Necessary Permits and Licenses

There may be required licenses and permits you need to obtain before launching your insurance agency.

For example, most states require insurance agents to be licensed. The requirements for obtaining a license vary by state, but they typically include passing an exam and completing a pre-licensing course. 

You must also register your insurance agency as a legal entity with the state where you plan to do business. You can simply file an online form through your Secretary of State website.

Registering with the federal government is also essential so you can properly pay taxes for your business. You will also need an Employer Identification Number (EIN), which you can apply for at the IRS website, if you plan to hire employees.


7. Determine Your Budget & Apply for Funding as Needed

In developing your insurance agency business plan, you will figure out how much funding you need to start and grow your business.

If you have your own funds to invest in your insurance agency, you may consider taking advantage of that. In addition to your personal funds, other forms of potential funding for your insurance agency include traditional bank loans, SBA loans, credit cards, angel investors and family and friends.

Read our article about the costs associated with starting an insurance agency to help you determine if funding is needed. 

Read our article about how to fund your insurance agency


8. Get the Technology & Software Needed to Run Your Business Efficiently

When you start your insurance agency, it’s essential to have the right technology in place to maximize efficiency. You definitely need a computer with Internet access, and accounting software for tracking expenses and revenues. 

You may also want to invest in customer relationship management (CRM) software, which helps insurance agencies track leads and sales. There are many CRM software options on the market, so be sure to do your research to find the one that’s right for your business.

In addition, you will need an email address specifically for your insurance agency, as well as a website.


9. Market Your Insurance Agency to Potential Clients

Before you start selling your products and services, you have to let the world know you exist. The first step is to create a website so people can learn more about your products and services and how they benefit them.

After you launch your website, start promoting it through social media channels like Facebook, LinkedIn and Twitter. Also consider networking with other people in the insurance industry through social media and blogs so they can help share your business. 

You also need to start gathering the materials needed to execute on your promotions strategy, which is your strategy for attracting new customers. Insurance businesses should consider the following promotional strategies for which you should start getting prepared:

  1. Sponsoring community events and charitable organizations
  2. Sending thank-you cards to current customers
  3. Offering free insurance consultations
  4. Providing online resources, such as educational blogs or calculators
  5. Distributing flyers and brochures to local businesses
  6. Partnering with other businesses in your community
  7. Creating video testimonials from satisfied customers
  8. Hosting educational seminars about insurance topics
  9. exhibiting at local trade shows and conventions
  10. Sponsoring a sports team or other club

Read our article about how to market your insurance agency for more tips.


10. Get New Clients & Grow Your Business

When you promote your products and services, you’ll start to get interest from potential clients

Make sure you’re ready to serve these clients. Also, be sure to establish systems to ensure consistency and reduce costs. And be sure to find and train the right people to help you grow your insurance agency.

Read our article about how to effectively grow your insurance agency to learn more.


Starting an Insurance Agency FAQs

The insurance industry is a $2 trillion industry with over 36,000 companies and 423,000 agents. The industry is growing every year, so there’s plenty of opportunity for new insurance agencies.

There are many reasons to start an insurance agency, but the three most common ones are:

  1. Helping people: Insurance agents help people protect their families, businesses and possessions.
  2. Earning a good income: Insurance agents can earn a very good living.
  3. Being your own boss: Insurance agents are their own bosses and have the freedom to work when and where they want.

In order to start a successful insurance agency, you need the following:

  1. A business plan
  2. The right location
  3. The right technology
  4. The right employees
  5. A solid marketing strategy
  6. New clients

There are many ways to market your insurance agency online. Here are a few tips:

  1. Create a website: Your website should be designed to attract new clients and provide information about your products and services.
  2. Use social media: Use social media platforms like Facebook, LinkedIn and Twitter to promote your website and engage with potential customers.
  3. Use search engine optimization: Use keywords on your website and in your social media posts to help potential customers find you online.
  4. Use pay-per-click advertising: Pay-per-click advertising allows you to place ads on search engines and other websites. When someone clicks on your ad, they are taken to your website.
  5. Use email marketing: Email marketing allows you to send emails to potential and current customers with information about your products and services.

Here are a few tips for starting an insurance agency:

  1. Choose the right type of insurance: There are many types of insurance, so make sure you choose the one that’s right for your agency.
  2. Get the proper licenses and permits: You will need to get a business license, an insurance license and any other required permits.
  3. Find the right location: The location of your agency is important for both foot traffic and online visibility.
  4. Invest in the right technology: Insurance agencies need to have a website, CRM software and other types of insurance-specific software.
  5. Create a marketing plan: You need to attract new clients to your agency. Create a marketing plan that includes online and offline marketing strategies.
  6. Train your employees: Your employees need to be properly trained in order to provide the best service to your clients.
  7. Get new clients: You can get new clients by networking, hosting events, exhibiting at trade shows and more.
  8. Grow your agency: Once you have a solid foundation, you can start to grow your insurance agency.

A simple checklist to use when starting an insurance agency is as follows:

  1. Choose Your Type of Insurance Firm: This should be based on what you are best at and how much experience you have. Remember to keep your interests, skills, and experience in mind at all times.
  2. Name Your Insurance Agency: This should be done with care, as your brand is important for attracting the right customers. A simple, memorable name will go a long way.
  3. Choose a Legal Form for Your Business: Whether you choose to become a sole proprietorship, partnership, LLC, corporation or another option will depend on your business. Ensure that you are aware of all the implications of each type.
  4. Determine Your Insurance Agency Business Model: Determine how your business will make money. Will you sell products, services, or a combination of both?
  5. Write an Insurance Agency Business Plan: Your business plan will also help you determine what your start-up costs will be and will provide a roadmap with which you can launch and grow.
  6. Apply for the Necessary Permits and Licenses: In most locations you will be required to apply for a business license and/or permits before you can begin operations.
  7. Determine Your Budget & Apply for Funding as Needed: You will need to know how much money you have to spend on all of your business-related expenses before opening any doors. If needed, apply for a small business loan or other funding options.
  8. Get the Technology & Software Needed to Run Your Business Efficiently: You need to have the right tools in place to succeed. Implement software that will help you manage your time, contacts, and business operations in general.
  9. Market Your Insurance Agency to Potential Clients: A solid marketing plan will be crucial to your success. It should focus on attracting the right customers so that you can provide them with the products and services they truly need. 
  10. Get Clients & Grow Your Business: Once you have a solid marketing plan, it's time to actively pursue and secure those who could benefit the most from your products and services



Starting an insurance agency can be a rewarding and profitable business venture. By following these simple tips, you’ll be well on your way to opening and running a successful insurance agency.