In Texas, getting an insurance license is the crucial first step if you want to build a career as an insurance broker, agent, or claims adjuster. For the purposes of this guide, Insurance Business will focus on how to become an insurance broker in the Lone Star State.
The process for becoming an insurance broker in Texas can be similar to the processes of other states but with some slightly different and at times, more stringent requirements. To guide you through the broker licensing process, Insurance Business provides you with this guide on how to become an insurance broker in Texas.
We’ll delve into the critical aspects of this process, including the educational and licensing requirements, and what you need to maintain your license. We will also shed light on important topics like how to become an insurance broker in Texas with no experience and how to become an insurance broker in Texas online.
There are times when consumers confuse insurance brokers with insurance agents. Both types of insurance professionals assist their clients in obtaining insurance policies and are licensed by the state in which they operate. Despite these similarities, insurance brokers and agents have important differences.
For one, an insurance broker acts as an intermediary between their clients and the insurance companies whose products they sell. Meanwhile, insurance agents in Texas and elsewhere represent only the insurance companies whose policies they sell.
Insurance agents can be captive agents, who sell insurance policies of a single insurer, or independent insurance agents, who sell policies of several insurers. You can look up the differences between these insurance producers in this guide about how to become an insurance agent.
Insurance brokers, meanwhile, technically act as financial advisers. Their job mostly consists of assessing their clients’ needs then researching the possible insurance products that can provide them with the appropriate coverage. Brokers must also give their recommendations with their clients’ best interests in mind – this is known as having a fiduciary duty to their clients.
In Texas and in many states across the country, the educational requirements for becoming an insurance broker are merely to have graduated from high school or have a GED. While this is the only educational requirement, aspiring brokers can benefit from obtaining a college degree.
A college degree can confer candidates with a good set of skills and foundational knowledge that can help them understand the complex jargon that is inherent in the insurance industry.
For instance:
These are not the only courses that can help you get a Texas insurance license or start your career in insurance. Any college degree that teaches you how to collect and evaluate relevant data then choose the option that gives the best outcomes can be useful when applied to insurance brokering.
Courses that hone a broker candidate’s analytical and critical thinking skills are likewise beneficial. So, if you want to choose a useful degree, think of how you can apply the knowledge and skills you get from the course. Even if degrees are not necessary to become a broker in Texas, keep in mind that a degree can give you an edge over other applicants.
You can also check our list of the top 10 websites for insurance sales training to help you prepare for your insurance broker career.
Those aspiring to become an insurance broker in Texas must first meet a few eligibility requirements set by the Texas Department of Insurance (TDI). These are the necessary prerequisites for the Texas insurance license:
These prerequisites are critical for protecting consumers and for maintaining a level of fairness and professionalism in Texas’ insurance market. Passing state licensure exams is crucial to ensure that brokers are competent and knowledgeable. Stipulating that licensees have no past offenses or felonies ensures that brokers are conscientious and can be relied upon to adhere to laws, regulations, and ethical standards.
Here’s how to get your insurance license in Texas, whether you want to become an insurance broker, insurance agent, or claims adjuster:
There are different conditions for these courses, and depend on whether the applicant is an:
While Texas does not require prelicensing courses for brokers or agents, they are necessary in certain cases. An aspiring broker or agent can take prelicensing courses if they need to obtain a temporary license. Temporary licenses are given to insurance producers of these types of insurance:
The temporary license is granted to insurance producers lasts for a maximum of 90 days. The purpose of this license is so producers can operate as if they were fully licensed, pending their examination and approval for the permanent license. Pre-licensing courses are likewise not required but candidates are advised to take them due to the complexity and difficulty of the licensure exams.
Those who wish to become insurance claims adjusters must take pre-licensing courses. The prescribed courses take about 40 hours each, and are for these types of adjusters:
Note that insurance producers or adjusters with temporary licenses need sponsorship to acquire their temporary license. Their sponsor may be a licensed insurance company, insurance agency, or individual agent. They must also complete 40 hours of pre-licensing education no later than the 14th day after the day they made their application for the temporary license.
For their pre-licensing education, aspiring producers or adjusters may do self-study, study online, or take in-person classes.
This guide on insurance pre-licensing courses can help you choose the right subjects for your chosen career.
Before taking the Texas licensure exam, it’s wise to decide on which lines of insurance you want to work on, since the Lone Star state has several insurance career options. According to the TDI, these are the most common licenses candidates apply for:
Once you’ve decided on a specific career path, you can go ahead and take the next step. If you need to know more about the adjuster role and how much they earn, you can refer to our guide on claims adjusters.
Keep in mind that the Texas insurance license exam is one of the most difficult exams. Fortunately, aspiring brokers can find helpful materials to help them prepare. For an idea of what the exam is like, this is an outline of the state licensing exams provided by Pearson VUE, the testing provider for TDI.
The TDI allows you to take the test at home with a personal computer, while an off-site Pearson proctor observes you via their webcam and microphone. These exams consist of two sections of multiple-choice questions: the first comprises basic insurance concepts, while the second covers insurance regulations, laws, and strategies.
Visit the TDI to initiate a background check. This is important, since being an insurance broker involves working in the best interests of your clients. The TDI needs to make sure that licensed brokers in Texas respect the law and have high ethical standards.
You must get fingerprinted and answer questions about offenses that come up in your records, if you have any. Be sure to include a copy of your completed background check with your insurance broker license application.
You may proceed with your license application after you have confirmation that you passed the licensing exam and have completed your background check. Include your personal details, certification that you completed a state-approved pre-licensing course (if applicable) and your educational background.
After you submit your application, you will be assigned a National Producer Number (NPN) from the National Association of Insurance Producers (NAIC). This number is assigned to license applicants so they can track the status of their application.
Get more information on how to get your Texas insurance license in this guide.
To maintain their insurance license, brokers in Texas are required to earn Continuing Education (CE) credits. This consists of 24 hours of instruction every two years. The CE credits include three hours' worth of ethics classes.
CE requirements are part of the license renewal process and keep brokers updated on industry trends and changes, apart from maintaining their professional competency. These requirements can also ensure that brokers in Texas adhere to insurance laws and regulations and stick to their fiduciary duty to clients.
According to Ziprecruiter, the average salary in Texas is $65,024 a year. Meanwhile, the average insurance broker salary in Texas is a comparatively impressive $95,364 a year, according to Indeed.
How much an insurance broker in Texas makes depends on factors like their years and level of experience, location, and individual skill. Speaking of location, here’s a look at insurance broker salaries in different parts of Texas:
|
City |
Annual salary |
|
San Antonio |
$112,954 |
|
Fort Worth |
$110,035 |
|
Dallas |
$109,250 |
|
Austin |
$103,630 |
|
North Richland Hills |
$101,020 |
|
Houston |
$95,057 |
Source: indeed.com
The standard practice is to renew it every two years, and complete 24 hours of Continuing Education. Note that the CE can be taken as 12 hours of classroom instruction and 12 hours of online study. Be sure to provide proof of completing these CE courses when renewing your license.
Technically, the main parts of the process for how to become an insurance broker in Texas are accomplished online. The pre-licensing courses you may take can be done online and the actual broker licensing test is done online with an offsite proctor monitoring.
Yes, this is possible, even if you don’t have any prior experience in the insurance industry. If you check the requirements for obtaining a broker's license, there’s a greater emphasis on an aspiring broker’s determination, soft skills, and the ability to connect with clients. That’s why even graduates fresh out of college can become insurance brokers. Anyone with the determination and willingness to will have little reason to not obtain their license and start an insurance broker career.
How did you find this guide on how to become an insurance broker in Texas? Let us know your thoughts in the comments.
