How much commission do auto insurance agents make?

How much commission do auto insurance agents make? Auto insurance agents typically earn a commission of about 17.5% of the value of the sale. Up to 20% of their income may come from commissions.

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Mathew B. Sims is Editor-in-Chief and has authored, edited, and contributed to several books. He has been working in the insurance industry ensuring content is accurate for consumers who are searching for the best policies and rates. He has also been featured on sites like UpJourney.

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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 (BBB A+). 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 and Safeco. He reviews content, ensuring that ex...

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Mar 11, 2021

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Here's what you need to know...

  • Insurance agents can make as much as $100,000 per year.
  • Up to 20 percent of an insurance agent’s income may be from commissions.
  • A comparison tool lets you quickly review several insurance policies and carriers.

Driving without insurance is illegal, and in your search for the most affordable auto insurance rates, you’ve likely come across some auto insurance agents. How much commission do auto insurance agents make? How much is an insurance broker’s salary? When you purchase an auto insurance policy, you may wonder how much money the insurance agent earns from your policy.

Depending on the insurance agent and company, the agent could receive a salary and commissions or just commissions (which is the most common form of compensation). Agents that earn salaries and commission tend to earn more per year than agents that only earn

Those that earn an insurance agent salary and commissions tend to earn more per year than agents that only earn a commission. Most independent insurance agents earn their keep on commission only.

On the other hand, captive agents often earn from commissions. However, they may also get a salary from their insurance company (captive agents are exclusively tied up to the insurance products from one company).

Unfortunately, in most states, what an insurance agent is paid is a tightly held secret.

However, the Bureau of Labor Statistics states that the median wage for all insurance agents was $47,860 in 2014. Unfortunately, that number is a yearly average that includes salary income and commission income.

Instead, they take the information you provide and show you insurance policies that meet your criteria. Type your ZIP code into our free and helpful tool above to find affordable auto insurance quotes in your area.

What are the Average Annual Salaries of Insurance Agents?

What your insurance agent earns per year depends on whether he or she works for one insurance company or as an independent agent. Insurance agents that work for one specific company tend to earn more than insurance agents that operate independently.

According to U.S. News Money, the average yearly salary for insurance agents was $48,210.

The lowest paid agents earned $26,030 per year, and the highest paid agents earned more than $100,0000 per year.

The location also factors into what an insurance agent earns. Insurance agents based in large cities tend to earn more than agents that live in rural areas. This is because the city provides them with a broader customer base.

Insurance agents in Bloomington, IN, Farmington, MA, and Santa Ana, CA make the most money on average. If you’re worried about a potential insurance agent inflating your premiums to increase his or her paycheck, you can use a comparison tool to check auto insurance policies and get several different quotes.

Captive insurance agents generally earn an initial commission between 5 and 10 percent of the value of the policies.  Then they get renewal commissions each time their client renews the policy.

If you’re worried about a potential insurance agent inflating your premiums to increase his or her paycheck, you can use a comparison tool to check auto insurance policies and get several different quotes.

  • Insurance agents earn anywhere from $48,000 to more than $100,000 per year
  • Large city agents make more than their rural counterparts
  • Independent agents earn less than agents working for one company

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What is the Average Insurance Agent Commission?

Auto insurance agents earn between 15 and 20 percent per auto insurance policy, according to The Wall Street Journal.

For example, if your annual policy costs you $700 per year, your insurance agent earns between $105 and $140 for your policy.

Insurance agents may get additional income for customer retention and policy renewals, but those income sources are generally reliant on the particular insurance company.

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How to Lower Your Rates

If you’re concerned about the cost of your auto insurance policy, you can take steps to make it more affordable by raising your deductible and ensuring you have all the appropriate discounts.

If you have a policy that includes comprehensive and collision insurance, you were required to choose a deductible, which is the amount you must pay before your insurance company repairs or replaces your auto after an accident. Read our article what is the difference between collision and comprehensive auto insurance?

Let’s take a look at a quick table showing what coverages are required and what coverages are optional. Keep in mind that if you add optional coverages, your agent’s commission will rise.

Type of CoverageRequired or Optional
Liability
Required
Collision
Owned Vehicle: Optional
Leased or Financed Vehicle: Required
Comprehensive
Owned Vehicle: Optional
Leased or Financed Vehicle: Required
Personal Injury Protection (PIP)
Required in some states with "no-fault" laws
Medical Payments (MedPay)
Required in some states with "no-fault" laws
Uninsured/Underinsured Motorist Coverage
Required in many states
Guaranteed Auto Protection (GAP)
Optional
Personal Umbrella Policy (PUP)
Optional
Rental Reimbursement
Optional
Emergency Roadside Assistance
Optional
Mechanical Breakdown Insurance
Optional
Non-owner Car Insurance
Optional
Modified Car Insurance Coverage
Optional
Windshield CoverageOptional
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Typical deductible amounts range from $250 to $1,000.

Raising your deductible amount from $250 to $500 or from $500 to $1,000 can save you money on your premium each month.

The next step is to make sure you have all the discounts that apply to you. Insurance companies give discounts for safe drivers, seniors, and low mileage drivers.

You may also be able to get discounts if your automobile has certain built-in safety features.

If raising your deductible and ensuring you have all the available discounts doesn’t lower your premium enough to fit your budget, you can use a comparison tool to check the premium rates of several different insurance companies and auto insurance policies.

Premium rates for auto insurance policies can vary greatly between insurance carriers:

  • Raise your deductible
  • Double-check your discounts
  • Lower your auto insurance coverage
  • Use a comparison tool to find a more affordable policy

Depending on the location of your insurance agent, his or her experience level, and the particular insurance companies he or she works for, your insurance agent’s annual salary and the commission could vary greatly.

In general, auto insurance agents earn between 15 and 20 percent in commission and a salary. If you are concerned that you are paying too much for your auto insurance, you can use a comparison tool to quickly receive information and prices for other insurance policies.

Ready to buy auto insurance? Enter your ZIP code into our free and helpful tool below to find affordable auto insurance rates in your area.

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