Passive Income as a Part-Time Insurance Agent | Real Estate Side Hustles

TL;DR

A part-time insurance agent can build passive income by earning commissions on policies for personal properties, managed properties, friends, and investor referrals. Ashley Kehr receives 60% of the agency’s commission when she binds a policy, while the agency receives 10% to 20% of the premium; qualifying renewals also generate ongoing income. Read on to understand the commission structure, licensing considerations, and benefits for real estate investors.

Transcript

unless you are bold enough to self-insure then you need insurance on your rental properties a couple years ago i had the opportunity to get licensed as an insurance agent in new york state and help start an insurance agency from scratch i'm currently licensed for property casualty and life accident and health insurance i started out only quoting in... Read More

Key Insights

• Becoming a licensed insurance agent can provide a passive income stream through commission on policies written for personal and managed properties.
• The initial commission for writing a policy can be substantial, with ongoing renewal income as long as the policy remains active.
• Insurance agents can earn between 10% to 20% of the policy premium, with a portion of this going to the agent as commission.
• There are challenges in insuring certain types of properties, such as those with pools or trampolines, which can be mitigated by understanding insurance requirements.
• Holding an insurance license allows for better assessment of property insurability, avoiding potential pitfalls during the purchasing process.
• The process of becoming an insurance agent varies by state, and potential agents should research specific state requirements for licensing.
• The side hustle of being an insurance agent is compared to being a realtor, with the advantage of passive income from policy renewals.
• Working with an experienced agency can streamline the process and provide support, making it feasible to focus on other real estate activities.

Questions & Answers

Q: How can a part-time insurance agent earn passive income?

An agent can earn commissions by writing policies for personal rental properties, managed properties, friends, and other investors. Ashley Kehr treats her renewal and referral commissions as passive income because the agency now handles the work for her.

Q: How does being a licensed insurance agent benefit a real estate investor?

A licensed agent can earn commissions on policies for properties they own or manage. The insurance knowledge also helps the investor identify features that could make a property difficult or expensive to insure before purchasing it.

Q: How are commissions calculated when an insurance policy is first written?

When Ashley first binds a policy, she receives 60% of the commission that the agency receives from the insurance company. The insurance company pays the agency between 10% and 20% of the policy premium, depending on the company writing the policy.

Q: How does insurance renewal income work?

For each additional year a policy remains with the company, the agency earns 10% of the premium. Ashley earns 10% of that agency commission, creating ongoing income from policies that continue.

Q: Can an agent earn a commission by only referring customers?

Yes. Ashley says she receives a 10% commission in the first year for making a referral while the agency does the work. Referral-only business does not provide her with renewal income.

Q: Which property features can make landlord insurance difficult to obtain?

The transcript identifies row houses, pools, trampolines, and wood-burning stoves as features that insurance companies may dislike for landlord policies. Ashley says such issues previously forced her to pay a lot for minimal coverage.

Q: How does working as an insurance agent compare with becoming a realtor?

Both roles can generate commissions connected to real estate, but insurance policies can produce renewal income each year. Ashley considers insurance work less demanding because it does not require managing a buyer or seller, although realtor commission checks may be larger.

Q: What should someone do to become a licensed insurance agent?

Licensing requirements depend on the state, so prospective agents should research the requirements for their own state. Ashley was licensed in New York for property and casualty insurance as well as life, accident, and health insurance, and she says the right agency can provide staff support while an agent learns.

Summary & Key Takeaways

• Ashley Kehr discusses her journey of becoming a licensed insurance agent and how it benefits her real estate investments. She highlights the passive income potential from commissions on policies written for her properties and those she manages. The video outlines the advantages and challenges of this side hustle.

• The content explains the commission structure for insurance agents, emphasizing the renewal income aspect. Ashley shares insights on how being an insurance agent helps in assessing property insurability and avoiding insurance-related issues during property purchases. She encourages viewers to explore this side hustle.

• Ashley compares the insurance agent role to that of a realtor, noting the differences in work and income. She provides resources for viewers interested in pursuing insurance licensing and invites them to share their own real estate side hustles. The video is a guide for real estate investors seeking additional income streams.