How much does State Farm charge for independent agency?

by otchick » Thu Jul 03, 2008 08:07 pm

What does Allstate or State Farm charge to become independent agent with them?

Total Comments: 42

Posted: Fri Jul 04, 2008 09:29 am Post Subject:

Hi othick,

I'm sure that becoming independent agent with either of these two giants of the insurance industry does involve some amount of costs. if you're not an agent already, you have to undergo the training to obtain license. Also, there are costs involved in setting up the office and maintaining business book.

Moreover, though some of the companies offer assistances in terms of lead generation, you have to bear the costs of contacting prospecting customers through calls, mails or by arranging seminars.

Again, you're required to meet the minimum sales target set by the companies in order to keep their names attached with your business.

However, its certainly a rewarding career if you can do it successfully. Best of luck!!

Posted: Fri Jul 04, 2008 10:00 am Post Subject:

Hi otchick, welcome to ampminsure. Hope you'll enjoy your stay here.

Anyways, I've found an old discussion on State Farm in our board. Check if the information helps you. Also, just hang tight, the other members will shortly be around with more help. Tk cr.

Posted: Sat Jul 05, 2008 06:59 am Post Subject:

AllState and State Farm both prefer having captive agents more than independent ones. Being the captive agent, you may get the access to their lead database and can also use their infrastructure for doing business.

Also you need to become an Approved Candidate with State Farm to get started with their name. But again, State Farm prefers insiders more than the new applicants for agencies.

The reason may be that an agent, who has a proven track record with the company, will find it easier to amalgamate with the environment.

Posted: Fri Jul 11, 2008 12:21 am Post Subject:

Most of the captive agent carriers, the biggest being State Farm, Allstate and Farmers, require an initial amount of capitalization (money in the bank) before they will allow you to open an agency. From what I hear, the minimum required capitalization amount is approximately $25,000, with some requiring $50,000 or more in the bank. The reasoning is simple- you'll have to have enough $$$ to live on while you are building your business.

They will also run exhaustive background checks, including criminal, credit and possibly MIB reports. If you cannot pass "muster" on any of them, you will not be granted an agency contract. It is rare that captives will waiver on this.

InsTeacher 8)

Posted: Fri Aug 15, 2008 10:35 pm Post Subject:

Are agents required to obtain a business license?

Posted: Sun Aug 17, 2008 05:52 am Post Subject:

Those are both excellent companies and many of their agents are very successful However, I would worry about being a captive agent and having so much invested in one company. I'd hate to tie up $75,000 and then later find that my company is not competitive in my market.

Again, those are great companies. In fact Allstate is very competitive in my market. But I have seen companies that were once competitive and easy to sell price themselves out of the market. This has a devastating impact on their agents.

Posted: Sun Aug 17, 2008 01:33 pm Post Subject:

The other problem is that, depending on which company you choose, you may not even be investing in your own business. It is my understanding that some of these companies give you no ownership of your book. If you walk or they cut you loose, you are out 100% of your time and money. But, then again, I'm a DIY kind of person and all I need is someone to ask a question every now and then. I don't put much value on "training" and "support". An Indy agency can answer questions and let me own my business. Not to mention, like Alston said, I'm always competitive.

Posted: Mon Sep 22, 2008 08:56 pm Post Subject:

InsTeacher is correct - some very good points.

OHInsAGNT - also correct. State Farm, for example, you do not have economic interest in your book of business when you sell it. Allstate, for example, does. When you "retire" and sell your book of business, every penny is yours.

Posted: Sun Oct 04, 2009 11:25 pm Post Subject:

i went to both process and they are the same.

Posted: Mon Oct 05, 2009 04:30 pm Post Subject: Allstate-Statefarm-Farmers

All 3 of these companies have there good points and bas points. Make No mistake about it You Are Expendable, They will drown you with Legal costs. Even though your contract states you are an independent agent YOU ARE NOT, You will perfom and sell what they ecpect you to sell, I have seen many Agent Lawsuits escpecially with Farmers. Spent 25 years w/Farmers, and no I was not fired, I left as I was so disgusted with the two face management. Keep in mid Farmes was sold 2 times ( BAT & Zurich) also they have turned over all of the management ( fired) Due your due diligence, Unless you will walk ther way 100% DON'T DO IT!! You Will be Sorry :-)

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