How to Start Insurance Companies

If insurance is in your blood and it is something you cannot live without, you might wonder what it takes to start insurance companies.

Starting insurance companies can be a long process. It might take years to get the necessary funding in place before a policy can be written. Some insurance companies specialize in certain areas of insurance, but it might be to your advantage to offer life, health, vehicle, flood and homeowners insurance.

It will be necessary to be a licensed insurance agent. You will have to pass several state exams before being allowed to sell insurance. The exams test your knowledge of the types of insurance involved and once you pass, you will receive your insurance license.

It will be necessary to work as an insurance agent and have about five years of experience under your belt before you can consider starting insurance companies. Your years of experience can be as an agent for a specific insurance company or you can be an independent contractor and work from home or anywhere you may establish an office.

Once you are eligible to start insurance companies you will be required to get a corporate insurance license. This license will allow you to sell insurance under your own name. The corporate license will come from the state where you will do business. Each state has their own rules and regulations for granting a license but the essence of the law is the same in each state. You will be required to fill out an application that includes the name of the company, a certified copy of the Article of Incorporation, an original copy of the Certificate of Existence or a Doing Business As document and a copy of a Good Standing Letter, that states all your application obligations have been met. Your business will also need a tax identification number

Applying for a business loan to start insurance companies might be a bit of a hurdle to conquer. You will need a loan of anywhere from $200,000 to $1 million. You will need an excellent credit history and a sounder than sound business plan.

Once funding is in place, there are two ways to start up insurance companies. One is to buy a franchise and work as an independent insurance contractor for a bigger company or open your own private insurance company. To open your own private company will involve establishing relationships with insurance brokers and financial companies to help provide the necessary products.

Once your business is in place and your business plan is working, it is time to establish a location. You want to be where you will be visible and there is a lot of foot traffic. In or near a busy shopping plaza on a main street will generate a lot of visibility. It is not necessary, or even advisable to choose a large office. It will be better and more economical in the long run to start with a small place of business and grow into a larger space as the business grows.