How much commission do auto insurance agents make?

The average agent earns a median wage of $49,840 per year or $23.96 per hour, but their commission rates ultimately vary based on several factors.

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Rachel Bodine graduated from college with a BA in English. She has since worked as a Feature Writer in the insurance industry and gained a deep knowledge of state and countrywide insurance laws and rates. Her research and writing focus on helping readers understand their insurance coverage and how to find savings. Her expert advice on insurance has been featured on sites like PhotoEnforced, All...

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Written by Rachel Bodine
Feature Writer Rachel Bodine

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 and Safeco. He reviews content, ensuring that ex...

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent Daniel Walker

UPDATED: May 19, 2022

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Here's what you need to know...

  • A typical insurance agent earns $49,840 annually or $23.96 per hour
  • Insurance agents earn fees and commissions for selling insurance products
  • Many factors influence what agents earn and these are directly tied to how much their clients spend on premiums

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. 

And most insurance agents are paid a fee or commission based on the number of clients they bring in and the insurance product volume they sell. So, those who sell more tend to get paid more, and vice versa.

How much money do insurance agents make?

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 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 will depend on a combination of factors.

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Fees vs. Commission Rates for Insurance Brokers

Typically, insurance agents make money through 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 payment 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 fees.

Factors Affecting Insurance Agent Commission Rates and Fees

Below are some factors that affect the commission rates for insurance agents and brokers.

Who The Agents Work For 

Some 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 for multiple companies. In these cases, agents may specialize in one kind of product or may sell various insurance policies from various carriers.

Generally, the insurance agent commission rates for captive agents tend to be lower. They usually get paid 5% to 10% of the premiums they sell. But their independent counterparts may make as much as 15% in commissions for each policy they sell.

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. 

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 your broker 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 are likely to attract higher premiums.

For example, teens tend to have less driving experience and higher rates of accidents. Because of their age, they attract more expensive premiums. Therefore, agents who sell insurance products to clients in this demographic will make more because the policies are more costly in the first place. 

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 car insurance options available to protect them until they can gain more experience.

The Coverage Provided

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

Since insurance agents make money based on premiums, the more add-ons they manage to tuck into a policy, the more money they will make. 

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.

Insurance Agent Commission Rates Vary Widely

While the typical insurance agent makes $49,840 per year, most will earn varying income levels. That’s because many factors influence these earnings. 

So, auto insurance buyers must be on their toes to ensure they get the best deal possible from their insurance agent.

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