How to Start an Insurance Agency
The set-up steps for an independent insurance agency, with licensing left to your state's insurance department.
An insurance agency starts with the licensing question, which your state's insurance department answers, then the usual business set-up: registration, a tax ID, a bank account and your own coverage. How agents bill clients for fees, where that's allowed, is covered in the insurance agent invoicing guide linked below.
The BLS page on insurance sales agents (In the US, BLS, last modified August 27, 2026) says "Agents must be licensed in the states where they work." It also says "Information about insurance sales agent licensure is available from state insurance department websites." On pay, it says "Independent agents may be paid by commission only."
A first fee invoice with sample figures, for work your state's insurance department allows you to charge for: a coverage review at 1 × $300.00 and 2 hours of policy comparison at 2 × $100.00 = $200.00 come to $300.00 + $200.00 = $500.00. Use your own figures; these are only an illustration.
Step-by-step startup guide
Follow these steps to launch your insurance agent business on solid footing.
- 1
Start with your state's insurance department
The BLS (In the US, BLS, last modified August 27, 2026) says "Agents must be licensed in the states where they work." Your state's insurance department sets the steps.
- 2
Decide whether to add certifications
The BLS (In the US, BLS, last modified August 27, 2026) says "A number of organizations offer certifications that show an agent’s expertise in insurance specialties. These certifications are not required for employment, but they may give job candidates an advantage over other applicants."
- 3
Register the agency
The SBA's launch guide (In the US, SBA, checked October 31, 2026) says "Your location and business structure determine how you’ll need to register your business." Ask your state's insurance department about any agency-level requirements too.
- 4
Tax ID and banking
The SBA (In the US, SBA, checked October 31, 2026) says "Your Employer Identification Number (EIN) is your business’s federal tax ID number." It also says "As soon as you start accepting or spending money as your business, you should open a business bank account."
- 5
Arrange your own coverage
The SBA (In the US, SBA, checked October 31, 2026) says "You also may be legally required to purchase certain types of business insurance." Ask your state's insurance department what, if anything, an agency must carry.
- 6
Set up how you'll get paid
The BLS (In the US, BLS, last modified August 27, 2026) says "Independent agents may be paid by commission only." Before you invoice a client for any fee, check your state's rules on agent fees.
Tips for starting your insurance agent business
- Keep each client's policies, renewal dates and notes in one place.
- Ask an accountant how self-employment tax applies to your commissions. The IRS (In the US, IRS, last reviewed or updated October 30, 2026) says "The self-employment tax rate is 15.3%."
- Choose a record system you'll keep up. The IRS (In the US, IRS, last reviewed or updated May 1, 2026) says "You may choose any recordkeeping system suited to your business that clearly shows your income and expenses."
- Ask your state's insurance department about continuing education well before your license renewal date.
How Billed helps you get started
Features to look at as you set up your business.
Client Profiles
Billed's features page lists "Client Profiles": "Create and save client profiles to bill them quickly."
Due Dates
Billed's features page lists "Due Dates": "Set due dates for payment on your invoices so your clients know when they have to pay you."
Payment Receipts
Billed's features page lists "Payment Receipts": "Send payment receipts to your clients after they have paid for your invoices."
Invoice History
Billed's features page lists "Invoice History": "Billed App keeps complete history about the Invoice and its payments from the moment it is created."
Frequently asked questions
Invoice Your First Fee
Create invoices, track payments and keep your clients' details in one place with Billed.
At a glance
| Stage | What to check | Source |
|---|---|---|
| License | "Information about insurance sales agent licensure is available from state insurance department websites." | BLS (In the US, BLS, last modified August 27, 2026) |
| Registration | "Your location and business structure determine how you’ll need to register your business." | SBA (In the US, SBA, checked October 31, 2026) |
| Tax ID | "You never have to pay a fee for an EIN." | IRS (In the US, IRS, last reviewed or updated October 16, 2026) |
| Fee invoices | Only where your state allows agent fees | Your state's insurance department |
When this isn't for you
If you'll sell for one carrier as its employee, these business steps won't be yours to handle; ask the carrier.