How much do auto insurance agents make?

When you buy auto insurance, how much do insurance agents make? That answer will change depending upon the individual agent; however, most agents earn a commission of 5-10% whenever they sell an auto policy, and they can earn a smaller renewal commission every time you decide to renew your auto policy. Now, if you do not like the service your agent is providing, you can shop online to find a better insurance company for you.

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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 5, 2022

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Things to Remember

  • Most insurance agents do not earn a yearly salary
  • Insurance agents typically earn a commission when they sell a policy
  • You can shop for free insurance quotes online

How much does an insurance agent make per hour? Well, this may be shocking to hear, but your insurance agent probably doesn’t earn an hourly wage.

You see, insurance agents work primarily in sales. So, like most other sales professionals, they tend to make their money via commissions rather than by earning strict yearly salaries. But how does that work? Whenever an insurance agent sells you an expensive or affordable auto insurance policy, the agent earns a small amount of profit from that sale.

If you’re looking for affordable auto insurance, asking “How much do insurance agents make?” is a very intelligent move since knowing how the insurance industry works can help you make the best choice for your coverage and budgetary needs.

In short, an insurance policy that provides more coverage costs you more money. And the commission rates on particular products might be higher than others, so it’s best to know if your agent is selling you something that you actually need.

Now you may be wondering, “How much do insurance agents make on auto insurance quotes?” Accessing an insurance quote is free, so you can request as many as necessary to verify that you are making the best decision for your insurance needs.

If you’ve caught yourself wondering, “How much do insurance agents make per year?” enter your ZIP code to obtain free auto insurance quotes right away.

Which insurance agents make the most money?

The earning potential for insurance agents is essentially untapped. Depending upon the agent’s drive to work new leads, cross-sell insurance products, build up a large pool of referrals, and provide excellent customer service, an agent can accrue a considerable amount of money from commission rates.

But typically, as reported by the U.S. Bureau of Labor Statistics, insurance agents can expect to take home slightly over $50,000 a year. There are also agents who take pay upon renewal when their current clients decide to continue working with the policy.

But have you ever wondered, “How much do auto insurance agents make per policy?”

Policy Commission Rates

If you have low auto insurance rates, how much do insurance agents make from selling you a policy? How much do insurance agents earn at State Farm or Progressive for that matter? Insurance companies pay insurance agents between 5% and 10% commission when an auto and home insurance policy is sold, but insurance agents licensed to sell life and health insurance may earn a 50% commission rate.

Now, if they work with a large auto insurance company, how much do insurance agents make? You can get an idea of how much agents earn at different companies by examining the average cost of insurance with each company and using the above percentages to estimate how much your agent may be earning per policy sold.

Average Annual Auto Insurance Rates by Company

Auto Insurance CompaniesAverage Annual Auto Insurance Rates
Liberty Mutual$4,331.75
State Farm$2,192.80
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It is important to remember that insurance agents can make money not merely from the commission on new policies but on policies that their clients decide to renew as well.

Policy Renewal Rates

Some insurance agents don’t always have to hustle every day to find new clients if they already have a large booking of business. So after you buy auto insurance, how much do insurance agents make when you renew your policy? Well, if you were to renew your auto policy, you would earn the agent who sold you that policy a renewal commission that typically runs between 2% and 5%.

This is why an insurance agent is incentivized to provide excellent customer service to their clients. If you are unhappy with the way that your agent is treating you, you can take your business elsewhere, which can be quite costly for your agent.

Now, before you threaten your agent with the loss of your business, you should ensure that your agent is aware of an issue. Whether the problem is stemming from poor service or your rates, it doesn’t matter. You, as a client, deserve to be heard if you are unsatisfied.

Sometimes issues are caused by a communication error, and simply explaining what you are upset about can immediately turn a negative situation into a positive outcome. Of course, if you’ve reached out to your agent to try and rectify an issue, and it seems as if you are getting nowhere, you can shop online to find an insurance company that is a better fit for you.

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What should drivers be aware of when buying auto insurance?

You must be aware that insurance agents make money by selling insurance products. This is not a scandalous practice in the least, but acknowledging this fact can help you be a more discerning consumer. Since some policies that come with higher rates also accompany a higher commission for the insurance agent, you should make sure that you trust that the agent has your best interests at heart.

For example, does the agent ensure that you know and understand each coverage listed on the policy? Does your agent regularly check your policy with you to ensure that you are receiving every discount for which you may qualify, like these listed below?

Common Auto Insurance Discounts Offered by Insurance Companies

Vehicle DiscountsDriver/Customer DiscountsPersonal Discounts
Active Disabling DeviceClaim FreeEmergency Deployment
Adaptive Cruise ControlContinuous CoverageFamily Legacy
Adaptive HeadlightsDefensive DriverFamily Plan
Anti-Lock BrakesDriver's EducationFederal Employee
Audible AlarmDriving Device/AppFurther Education
Automatic BrakingEarly SigningGood Student
Blind Spot WarningFull PaymentHomeowner
Daytime Running LightsGood CreditLife Insurance
Economy VehicleLoyaltyMarried
Electronic Stability ControlMultiple PoliciesMembership/Group
Farm/Ranch VehicleMultiple VehiclesMilitary
Forward Collision WarningNew Customer/New PlanNew Address
Garaging/StoringOccasional OperatorNew Graduate
Green/Hybrid VehicleOnline ShopperNon-Smoker/Non-Drinker
Lane Departure WarningOn-Time PaymentsOccupation
Newer VehiclePaperless/Auto BillingRecent Retirees
Passive RestraintPaperless DocumentsStable Residence
Utility VehicleRoadside AssistanceStudent Away
Vehicle RecoverySafe DriverStudent or Alumni
VIN EtchingSeat Belt UseVolunteer
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If so, your agent is more than likely looking out for your best interests and is attempting to put your customer experience before profit. However, if you feel like you are being pushed into buying insurance products that you don’t need or if you don’t feel respected by your agent, you should feel free to obtain quotes from other companies.

How Much Insurance Agents Make: The Bottom Line

Insurance agents do not tend to earn a pre-designated yearly salary. They are insurance experts who are also sales professionals, so 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.

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.

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.

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 do insurance agents make?”

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