Expanding Territory: Getting a Non-Resident Insurance License

Fran Majidi June 17, 2020
Non-Resident Insurance License

At SmartFinancial we not only advise insurance agents to diversify and sell as many lines of insurance as possible, but we also encourage agents to expand their territories and even consider applying for a non-resident insurance license in a nearby state or states.

If you want to sell in all 50 states, you’ll need to get licensed in each one because there is not one license to satisfy every state. This is because the rules and regulations surrounding insurance requirements are different in each state.

It’s important to keep in mind that you are only allowed to sell insurance or even to have conversations about it in a state where you hold a license. Yes, if you’re on a trip in Hawaii and are only licensed to sell in California, you are technically breaking the law if you discuss insurance in any detail.

Many insurance agents who live along the border of two states have multiple licenses for this reason. While it may have felt like a hassle getting both licenses, these agents are better off in the long-run because they can buy insurance leads in both states, opening up the market to sell lots of policies.

In the ideal instance, you’d have multiple state licensing and you’d sell multiple lines of insurance. In this very competitive environment, expanding beyond home and auto or -- vice versa -- life and health will be key to creating a sustainable business in the long haul. So will selling as many kinds of insurance in as many states as possible.

Here’s what you need to know about expanding your insurance territory.

Visit the Department of Insurance Website

Here you’ll find out what the requirements and fees are for getting a non-resident insurance license in the state(s) you’re interested in selling insurance. In some states, you’ll need to pass the state licensing exam, but in others you do not if you already are licensed in your resident state. Even if you don’t have to take an exam, you still have to apply for a non-resident insurance license.

If you work for a big agency or are growing one, you’ll need to apply for a license in all the states you’re required to sell in. You also have to have an insurance license in your resident state at all times. That may add up to be many licenses but there’s simply no way around it.

What’s a Reciprocal Agreement?

A reciprocal license agreement is an agreement that makes issuing a non-resident insurance license much simpler and with fewer requirements. For instance, there are pre-licensing courses, fingerprinting and exams that will be waived. All you have to do is pay an application fee and have your resident insurance license to be eligible. Most states have a reciprocal agreement when it comes to licensing agents who already are licensed in their home state.

Some states, like Florida and California, have more requirements, including fingerprinting. Some states require pre-licensing courses.

Reasons Why You’d Need Multiple Insurance Licenses

  • Your business operates a call center in multiple states
  • You write a national program
  • You market insurance across the U.S.
  • Your staff provides quote or policy benefits information to people in several states.

Insurance Leads for Multiple States

When you buy the best leads from SmartFinancial, you determine where you want the leads to come from by choosing area codes for the regions you want to cover. The more area codes, the higher the yield.

Buying insurance leads is a necessary component of any healthy insurance agency budget. In light of coronavirus and the necessary social distancing, more agents are using leads to grow their businesses. The freedom that comes with being able to do business just about anywhere also creates potential sales you may have never had otherwise.

The best lead providers, like SmartFinancial, will pair you with an Account Manager for the life of your account. This point-person will be on top of your account at all times, making the appropriate adjustments that will help you gain more sales.

In fact, your Account Manager will be there to help you target the best areas in the states you decide to get licensed in.

If you decide to do business in another state, it doesn’t mean you need to travel either. The technology available allows you to hold meetings from just about anywhere and even get documents signed online after you sell a policy. Using Zoom or FaceTime is highly encouraged. Sometimes a prospect is more open to doing business with someone if they just see the person on the other end of a conversation. There’s a lot to be said for body language and facial expressions, hand gestures. Much more is communicated when two people sit face-to-face and discuss important matters, like insuring one’s health, life, business or property. Start expanding today, without ever leaving home!