How to start an Independent Insurance Agency

I’m putting this together because I wish more than anything it existed when I first started my Independent Insurance Company.

This is how I did it. Doesn’t mean its the best way, but I got everything up and running in less than 2 months.

I operate in Pennsylvania so this may vary state to state. I focus on personal lines (Home and Auto).

If you want any particular details feel free to email me at

Personal situation: Everyone’s situation will be different, so I think its helpful to explain mine. I was 24 when I decided to start and 5 months post college graduation. My parent’s own a small hometown Real Estate office. They have developed a local network throughout many years and so have I. While in college I worked as a realtor for the family business then started selling mortgages. I wanted to start my own business utilizing the existing presence. Insurance it was.

Perspective: I had ZERO insurance experience. No family members or friends had any experience. This was the first hurdle and honestly the biggest one. I didn’t care. As far as current experience, I’m about 10 months in and still learning as I go.

Main Steps:

  1. Obtain Individual Residential Property and Casualty license
  2. Obtain name approval and register business with the state
  3. Apply for Agency Residential License
  4. Find a cluster/MGA (Access to carrier appointments)
  5. Purchase Errors & Omissions Insurance

Licensing: I used Kaplan to study for both property and casualty as well as life and health licenses. I took both tests in less than 2 week. Life was much harder than property and casualty (for me atleast). When it comes to the test it self I purely used the Q-bank which is their sample study questions. They break questions down to sections. I memorized every answer section by section. They were very very similar to the test it self.

Registering Your Business: I honestly do not remember the specifics. My only tip is to be patient. I used Legalzoom for the legal papers. Insurance requires the state to approve of your business name before you can form the business. So Legalzoom waited until i sent them the approval. Choose what business structure works best for you, I am a LLC which probably most other agencies are (I believe?). There are no pro tips for this unfortunately. Just be patient and understand this is the longest part.

Applying for Agency License: I believe I did this while waiting for my business paperwork to finalize, but its rather simple you just apply online.

MGAs (Managing General Agencies) and Clusters: This is how you gain access to carriers so you can actually sell Insurance. They give you access to a list of carriers that they have relationships with and in return you share your commission with them. That’s the gist of it. I spent a LOT of time researching MGAs. Summary, they all have pros and cons. Pick one that works for you. If you want suggestions feel free to email me. They all have different commission splits, up front and monthly fees, various restrictions and little exit strategy. And basically its impossible to start without one. Most wouldn’t even work with me because of my lack of experience. Regardless of experience though I would have went with the same one.

Remember this is how you get started. Once you build a book with a MGA they will help you gain access to carriers directly and instead of feeling like a middle man you will actually be binding (writing) policies yourself. At the same time, depending what limitations your MGA puts on you, you may be able to pursue other carriers on your own.

Pros of MGAs: They will help you gain direct appointment/access to companies MUCH faster than you would on your own. In return you usually have to share commission to a certain extant indefinitely. Cost of doing business I will keep telling myself.

Cons of MGAs: Depending on your MGA you give up a large chunk of your commission. And depending on your agreement, that could be forever. To be honest, I looked at it as cost of doing business with no experience and my only option. A percentage of something is better than a percentage of nothing, just get started. I have talked to many other agencies and the overall biggest complaint is turnover time. I’m sure its different MGA to MGA but it can take anywhere from 30 minutes to DAYS for a quote. You will lose business because of this. And you can never have someone just walk in and get insured. It will always be “Okay great as soon as I get this quote back we will go from there”. So the phone calls from the Honda sales room, you’ll never capture. Until you have direct access that is.

Outside Carriers: I probably reached out to every company. Ever. Understand my perspective. 24 years old, no experience, no book of business. When i first started calling companies I didn’t even know what to say. Me: “Hey I want to sell your Insurance” Underwriter: “Uhhh we will connect you to John from marketing”. I would get in John’s voicemail and every now and then actually get a hold of John on the phone. Most “Johns” would immediately ask how big my book was and the convo would end rather quickly after. “Try again next year kid” type of deal. I didn’t care, I stalked these reps. I would call weekly and plead my case.

I convinced my first rep, leveraging my situation of existing network from family business primarily. He set up a meeting, came out to my office and long story short I got direct appointment with my first company. After this the next couple became easier. Kind of. Remember, you can’t make all companies happy since they all have production requirements so pick a core few and rock with it.

Semi-pro tip, reach out to regional companies. Sometimes they can be easier to work with. They have a smaller family feel and might even be more competitive price wise.

Errors & Omissions Insurance: Not much to talk about here. Just buy it. My MGA helped me get mine. You can shop around but Its probably similar everywhere. Some people have a hard time getting it, to be honest I have no insight.


This is technically all you really need to get started.

  1. Computer
  2. All in one printer/fax
  3. Rater. This is the website/program you enter data to get a quote. They help organize client information too.


Almost all companies and even a MGA will require you to have an office. I lucked out because I took an empty room in my parent’s real estate office. I would suggest trying to do something similar. Reach out to any and all professional small businesses. Accountants, Mortgage companies, real estate offices, etc. Find one with the cheapest rent or best referral base. Find the cheapest clean desk and office furniture available. Make it work.


Errors & Omissions Insurance costs me $1800ish a year

My Rater costs me 105 a month and had a $200ish start up fee

Thats it

Miscellaneous Tips and Insight:

I choose Independent rather than captive primarily because of the….get ready…. independence. You still have reps from companies checking in on you but for the most part you are completely your own boss and no one is telling you what to do. Captive, you have corporate constantly making sure your in the office and producing. There is absolutely pros and cons to both.

You need a Rater but you absolutely don’t need a management system. Some people tell me its great but they are an expensive monthly fee that you don’t need starting out.

I get 90% of my business from referrals on Facebook from friends. I get the rest from my family’s real estate referrals and had exactly 2 walk-ins. I don’t have a traditional store front but I don’t think you need one. But it absolutely helps. I tried an expensive 3 month mail campaign designed for insurance companies, got 0 phone calls from like 3000 flyers.

I focus on personal lines, home and auto. Many people suggest commercial and I write some but for whatever reason its just not my preference, for now. I am licensed in life and health but am working with a mentor to learn A LOT more before I consider selling life and annuity products.

This is a referral business. Summer was DEAD for me. My goal for my first year wasn’t X amount of a book but 100 insured clients. To be honest I’m not even close, I’m going to guess I’m at 65 or so. I need to work on my organization skills.

My capture rate is low. Its a numbers game. Focus on quotes quotes quotes. It’ll come.

This is just an outline. I will absolutely add to this but just wanted to get something out there. Again feel free to email me at if you have any questions at all.


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