How much commission do auto insurance agents make? (2024)

How much do car insurance agents make? Usually, auto insurance agents make around 10%-15% in commission, and the average annual salary is $49,840. The primary work of insurance agents is to sell one or more types of insurance products to their clients on behalf of the companies they work for or partner with, so the primary source of income comes from the auto insurance agent commission. 

Read More: How do I become an auto insurance agent?

Below, we’ll explain more about how much commission a car insurance agent makes on average to answer questions like how much does an auto insurance agent make per policy and how do auto insurance agents make money. You can also enter your ZIP code above to start comparing free auto insurance quotes.

How Much Commission Auto Insurance Agents Make

So, how much does an auto insurance agent make? What is a car insurance agent salary? According to the Bureau of Labor Statistics, a typical insurance agent currently earns a median pay of $49,840 annually or $23.96 per hour. That is slightly less than the U.S. median household income of $51,870.

However, this is just the average auto insurance agent salary and doesn’t mean you are guaranteed to earn this amount as an insurance sales agent. Many agents earn various fees or commissions that influence their final income at the end of each year. 

So, what insurance agents make and how much do car insurance agents make per policy will depend on a combination of factors. Let’s talk a look at exactly how do auto insurance agents get paid.

Fees vs. Commission Rates for Insurance Brokers

Do car insurance agents get commission? Typically, auto insurance agents make money through car insurance commissions. 

First, they receive base commissions. These are usually a set percentage of the premiums sold by the agent and can change. In addition, insurance brokers may earn contingent commissions, which are dependent on whether they meet goals set by the insurer.

These goals may include a specified number of customers the agent must retain, acquire, or sell more products to. Contingent commissions are usually calculated at the end of the year and paid out the following year as an incentive for work well done.

And then, some agents will also tuck in extra fees on top of the commissions they pay to cover the cost of policy administration.

So, what auto insurance agents end up making, in the end, will largely depend on their specific insurance agency commission structure. And any client who works with insurance brokers should read the fine print to ensure they don’t end up paying more in hidden insurance agent fees.

You can check out a specific company’s insurance agent commission structure to find out more details about how much their car insurance agent commission is.

Factors Affecting Insurance Agent Commission Rates and Fees

How much do insurance agents make per policy? Below are some factors that affect the car insurance commission rates for insurance agents and brokers.

Who The Agents Work For 

Some auto insurance agents are captive agents, which means they work for only one insurer. In such cases, they can sell multiple insurance products. However, the products must belong to the employer’s company.

On the other hand, independent agents can sell insurance products to multiple companies. In these cases, agents may specialize in one kind of product or may sell various insurance policies from the best auto insurance companies.

But how much do independent insurance agents make? And how much commission does an insurance agent make if they’re a captive agent?

Generally, the insurance agent commission rates for captive agents tend to be lower than independent insurance agent commission rates. They usually get paid 5% to 10% of the auto insurance premiums they sell. However, their independent counterparts may make as much as 15% in commissions for each policy they sell, which means that the overall independent insurance agent salary is higher.

When shopping around for a car insurance policy, consider the agent you are buying from. Their employment situation may affect what you pay.

Where the Agent Lives

Some types of insurance coverage pay more than others, depending on where you live. That means that how much does an insurance agent make can also vary depending on the state. How much do insurance agents make in Florida? how much do insurance agents make in Texas? Those rates will vary depending on different factors.

For example, the average cost of auto insurance is $1,030 a year. But if you live in Illinois, you would pay $885 per year, while those living in Texas would pay $1,110 annually. 

So, where you buy your auto insurance will ultimately determine how much you end up paying and how much an insurance agent makes from your policy.

The Client’s Risk Factor

Insurers tend to consider the person’s risk profile they are providing coverage for before determining how much they will charge for premiums. So, those with a history of irresponsible behavior or a higher likelihood of accidents will likely attract higher premiums.

Read More: High-Risk Auto Insurance

For example, teens tend to have less driving experience and higher rates of accidents. Because of their age, they attract more expensive premiums. Therefore, auto agents selling car insurance to clients in this demographic will make more commission on car insurance policies because the coverage is more costly in the first place.

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And while that’s great for the agent, it’s not so good for the person paying for this higher-cost insurance coverage.

For this reason, it may be better for teenagers to get extended coverage from their parents. Parents could also designate their kids as occasional drivers while extensively researching the cheapest auto insurance options available to protect them until they can gain more experience.

Read More: Cheap Auto Insurance for Teens After an Accident

The Coverage Provided

Basic, or liability, insurance coverage tends to be cheaper overall, which means commission insurance agents who only manage to sell this kind of insurance will likely make less money. On the other hand, add-ons, such as comprehensive auto insurance coverage, will cost more because they provide a lot more protection for your vehicle and thus providing more for the agent on their auto insurance commission.

Therefore, as a customer, you need to determine beforehand whether you need all of the coverage an agent is selling you. Remember, they make money based on what they can convince you to purchase, even if you don’t need it. Keep that in mind when you’re considering the average commission for insurance agents.

Understanding How Much Insurance Agents Make

How do car insurance agents make money? Insurance agents do not tend to earn a pre-designated yearly salary. If that’s the case, how do insurance agents get paid? Are insurance agents paid by commission? Since they are insurance experts who are also sales professionals, they earn an income by making commissions whenever they sell a policy.

Your insurance agent can also earn a small commission whenever you decide to renew your auto policy. But how much do insurance agents make? That depends on a variety of factors including the agency commission structure or the insurance broker commission structure.

Now, it is important to remember that your insurance agent should put your insurance needs above a sale and shouldn’t try to sell you insurance products that you don’t need.

If you feel that your agent listens to you when you have an insurance issue, works hard to ensure that you understand your policy, and is more than happy to set aside time to review your policy with you to make sure that you aren’t paying too much, your agent is most likely doing their best to provide you with a positive insurance experience regardless of their own personal insurance agent salary.

Read More: How can I find auto insurance agents in my area?

However, if you don’t feel that you are receiving the best service, you should shop online to find the best insurance company for you. How much money do insurance agents make should not impact the quality of service you receive.

Enter your ZIP code to obtain free quotes from insurance companies near you. Hopefully, now you have some answers if you’ve ever wondered, “How much does an auto insurance agent make?” or “How do car insurance agents get paid?”