Chelsey Tucker graduated with a Bachelor of History degree from Metropolitan State University in 2019. She now writes about insurance with her specialty being life insurance and has been quoted on Help Smart Phone and MEL Magazine.

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years. He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com.

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Jan 14, 2022

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The Lowdown

  • Insurance agents earn a commission when they sell a policy
  • Insurance agents should help clients understand their insurance products
  • Drivers who are dissatisfied with their insurance agent can shop online for a new insurance company

Have you ever wondered, how much does an insurance agent make per hour?

Like most salespeople, insurance agents tend to make their money via commission. This means that whenever they sell you a policy, they earn a small profit on it. Now, if you’re on the hunt for affordable auto insurance, inquiring as to how much insurance agents make is significant, especially if you think someone is trying to sell you more auto insurance coverage than you need.

You might ask questions like, “how much do auto insurance agents make per policy?” or, “how much do insurance agents earn at State Farm?” The truth is more coverage costs more money. Commissions on certain products might be higher than others, but the more important question is what you as the consumer are getting out of it.

If you want to know how much insurance agents earn on auto insurance quotes, you’ll be happy to know that insurance quotes are free. You can get as many as you like without paying a dime.

If you’ve ever wondered, how much do insurance agents make on my policy? enter your ZIP code to obtain free insurance quotes.

How do insurance agents earn a living?

Unlike your neighborhood banker or public relations manager, insurance agents don’t typically earn a salary. Their income comes from commissions that they earn by selling insurance policies. Insurance agents are the “face” of the insurance company they represent. They help their clients choose the best products that their insurance company has available.

Every time an insurance agent sells a policy, a certain amount of the profit is siphoned off to them from the insurance company. According to the U.S. Bureau of Labor Statistics, insurance agents earn slightly over $50,000 a year, but that may be very different from the amount that your insurance representative makes. Some agents also take pay upon renewal to service policies with their known clients.

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What is an insurance agent’s commission rate?

This information may leave you wondering, which insurance agents make the most money?

How much an agent actually makes depends on their selling ability, client retention, and commission rates. Now, if a driver has expensive auto insurance rates, how much do insurance agents make? Well, insurance agents can earn anywhere between 5-10% commission from their company when selling auto and home insurance. So if you have high rates, you could be earning your insurance agent a nice chunk of change.

Insurance agents who are licensed to also sell life and health insurance could earn as much as a 50% commission rate when selling such policies.

This is where you’ll need to be cautious when purchasing insurance. While you can’t hold it against your insurance agent for attempting to make a sale, you should never let yourself be pressured into a policy that you don’t think you need. A reputable insurance agent will always try to ensure that you understand what you’re buying and that you are receiving every discount for which you are eligible, like those listed below.

Auto Insurance Discounts from Top Companies

Auto Insurance DiscountsAllstate (%)American Family (%)Farmers (%)GEICO (%)Liberty Mutual (%)Nationwide (%)Progressive (%)State Farm (%)Travelers (%)USAA (%)
Adaptive Cruise ControlN/AN/AN/AN/A5xxN/AN/AN/A
Adaptive HeadlightsN/AN/AxN/A5xxN/AN/AN/A
Anti-lock Brakesxxx555x5xx
Anti-Theftxxx252025x15xx
Claim Freexxx26x10x152312
Continuous CoveragexxxxN/AN/AxN/A15N/A
Daytime Running Lightsxxx155xN/Axx
Defensive Driverxxxx105105103
Distant StudentxxxxN/A10xx7x
Driver's Edxxxx10N/A101583
Driving Device/AppxxN/Ax30402050305
Early SigningxxxxN/A8xN/A1012
Electronic Stability ControlxxxN/A5xxN/AN/AN/A
Emergency DeploymentN/AN/AN/A25N/AN/AN/AN/AN/AN/A
Family LegacyN/AxN/AxN/AN/AxN/AN/A10
Family PlanN/AxxN/AN/A25N/AN/AN/AN/A
Farm VehiclexN/AxxN/AN/AN/AN/AN/AN/A
Federal EmployeeN/AN/Ax810N/AN/AN/AN/AN/A
Forward Collision WarningN/AN/AN/AN/A5xxN/AN/AN/A
Full PaymentN/Axxx$5N/AxN/A7.5N/A
Further EducationN/AN/AN/Ax1015N/AN/AxN/A
Garaging/StoringN/AN/AxN/AN/AN/AN/AN/Ax90
Good CreditxxN/AN/AN/AxxxN/AN/A
Good Studentxxx1522.510x2583
Green VehiclexN/A5N/A10N/AN/AN/A10N/A
HomeownerN/AN/Axxx5x35N/A
Lane Departure WarningN/AN/AN/AN/AxxxN/AN/AN/A
Life InsurancexN/AN/AN/AN/AxN/AN/AN/AN/A
Low Mileagexxxxxxx30xx
LoyaltyN/AxN/AxN/A5xN/AN/Ax
MarriedN/AN/AN/AN/AxxxxN/Ax
Membership/GroupN/AN/AN/Ax107N/AN/AxN/A
MilitaryxN/Ax154N/AN/AxN/Ax
Military GaragingN/AN/AN/AN/AN/AN/AN/AN/AN/A15
Multiple DriversN/AN/AN/AN/AN/AN/AN/AN/AN/AN/A
Multiple Policies1029x102010121713x
Multiple Vehiclesxxx25102010208x
New AddressN/AN/AN/AN/A5N/AN/AN/AN/AN/A
New Customer/New PlanN/AN/AN/AN/AxN/AN/AN/AN/AN/A
New GraduateN/AN/AN/AN/A5N/AN/AN/AN/AN/A
Newer VehiclexN/AxxN/Axx401012
Newly LicensedN/AN/AN/AN/A5N/AN/AN/AN/AN/A
NewlywedsN/AN/AN/AN/A5N/AN/AN/AN/AN/A
Occasional OperatorN/AN/AN/AN/AN/AN/AN/AN/AN/Ax
OccupationxN/Axx1015N/AN/AxN/A
On-Time PaymentsxN/AN/AN/AN/AN/AN/AN/A15N/A
Online ShopperN/AN/AN/AN/AN/AN/A7N/AN/AN/A
Paperless DocumentsxxxN/AN/A5$50N/AN/AN/A
Paperless/Auto BillingxxxN/Ax$30x$233
Passive Restraintxxx40x20x40xx
Recent RetireesN/AN/AN/AN/A4N/AN/AN/AN/AN/A
Safe DriverN/AN/Ax15N/A3531152312
Seat Belt UseN/AN/AN/A15N/AN/AN/AN/AN/AN/A
Senior DriverxN/AxN/AN/AN/AN/AN/AN/Ax
Stable ResidenceN/AN/AN/AN/AN/AxxN/AN/AN/A
Students & AlumniN/AxN/Ax107N/AN/AN/AN/A
Switching ProviderN/AxxN/A10N/AxN/AN/AN/A
Utility VehiclexN/AxxN/AN/AN/AN/AN/AN/A
Vehicle Recoveryxxx153525x5xx
VIN EtchingN/AN/AxN/A5xxN/Axx
VolunteerN/AxN/AN/AN/AN/AN/AN/AN/AN/A
Young DriverN/AN/AN/AN/AxN/AxN/AN/A$75

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But insurance agents don’t merely receive a commission from selling new policies. They also make money whenever a client renews their policy.

How much does an insurance agent make on policy renewals?

When you renew your auto or home insurance with a company, the agent who sold you that policy earns a commission between 2-5%. Now, if you happen to buy a life insurance policy and keep it in good standing, the insurance agent who sold it to you could earn 1-2% per renewal.

How can someone become an insurance agent?

An individual can’t simply walk into an office, hang a pretty sign on the door, and call themselves an insurance agent. They need to train and get licensed.

If you were to become an insurance agent, you would need to take a pre-licensing course which generally runs for a week and discusses the insurance laws of the state as well as general information on products like home and auto insurance.

Once that is completed, you will need to schedule an exam to get your license. There are multiple exams depending on what kind of insurance you plan to sell. For example, life insurance requires one license while homeowners policies would require both property and casualty licenses. When you pass the exam and complete the application process for license, you will be provided a copy of your license. After that, you will begin searching for an agency to hire you as an insurance producer. If you want to open your own agency, you will need in-house training provided by your insurance company and a desire to work your way up the ladder. You would also need state licensing for your brokerage.

In addition to that, you will need to maintain your insurance license by taking continuing education courses and renewal exams as needed.

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How much do insurance agents make: What You Need to Know

When you join a new auto insurance company, how much money do insurance agents make? Well, insurance agents make their money by selling insurance policies and earning commissions. If you want to purchase auto insurance, asking “How much do insurance agents make?” is a smart buyer tactic as it can prevent you from being forced into buying something that you don’t need.

Your insurance agent should listen to you, educate you on your insurance products, and help you secure every discount for which you are eligible. If you don’t feel like you have such a relationship with your insurance agent, you can also shop online for a new insurance company.

If you want to know how much insurance agents make on your policy, enter your ZIP code to compare free quotes from insurance companies near you.