What are the pros and cons of opening up a car Insurance business in California?

What are the pros and cons of opening up a car Insurance business in California?

- What are the pros and Cons of opening up a car insurance business in California?I plan on getting a business loan to open up a office where I sell car insurance. I plan on selling insurance like "-statefarm, allstate,ect"- to regular people. I need help on the business proposal so pros and cons would be greatly appreciated. All the help would be nice and if you have any good sources please put them down as well.. thanks.

Tom

Pros:Everyone who owns a car needs to have insurance so there is a huge market.Decent commissions.Cons:You can't just open up a car insurance business offering any insurance company you choose. You must be contracted with each carrier. Companies don't simply hand out agency contracts to anybody that asks.If you sell State Farm insurance you won't be offering any other companies. State Farm agents are captive agents.Many people who are seeking auto insurance also want homeowners insurance so your car insurance business will necessarily need to sell homeowners insurance as well.Start up costs. You will need office space, office equipment, computer hardware and agency automation software. You may need at least one employee.Competition. There are hundreds of agents in your market area that are established businesses.You must be licensed to sell insurance. You can't just get a business loan, open up a office and start selling insurance to "regular people".Source(s):...

mbrcatz

Honey, do you have any experience at this?The biggest con, is that if you have no idea what you're doing - ie, if you don't know the pros and cons - you're much, much more likely to fail. New agents have a 95% failure rate - they can't make enough to pay their licensing fees.Good luck on that loan. It's highly unlikely that State Farm or Allstate will appoint you, if you ONLY want to sell car insurance. It's also unlikely that they'll appoint you, if you don't have the money to open your own office, and have no other means of support.You do realize, don't you, that it takes 60 to 80 hour workweeks, cold calling and knocking on doors, to make $50,000 the first year?I'd STRONGLY suggest you get your license, and go to work for a local agency, to learn the business first. They'll provide you with lots of help and training - more than you'll get from State Farm and Allstate, together.

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