Vehicle insurance advisor commission


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Vehicle insurance is a must in India. As per the provisions stated in the Motor Vehicles Act, 1988, every vehicle which runs on Indian roads should have a valid insurance policy covering it. As such, vehicle owners have to buy vehicle insurance plans to legally drive their vehicles on Indian roads.

As vehicle insurance is mandatory, there is a great opportunity to become a vehicle insurance advisor and earn attractive Vehicle insurance agent commission on the policies that you sell. As a vehicle insurance advisor, you can sell vehicle insurance policies and earn Vehicle insurance agent commission on the premiums that you collect. Since many individuals own a two-wheeler or a car, you would be able to find ready customers to sell vehicle insurance policies.

You can become a vehicle insurance advisor with any insurance company which sells vehicle insurance. To become an advisor, you have to register yourself with a vehicle insurance company, undergo mandatory classroom training, appear for an online examination and clear the examination. Once the examination is cleared, you can become a licensed advisor and sell vehicle insurance policies offered by the company with which you registered.

Becoming a PoSP

Another alternative way to sell vehicle insurance policies is to become a Point of Sale Person (PoSP) . As a PoSP you would become an insurance intermediary and sell vehicle insurance policies. The benefits of becoming a PoSP are as follows –

  • You can sell vehicle insurance policies of all leading insurance companies
  • You can allow your clients to compare the different vehicle insurance plans offered by leading insurers and then choose a policy
  • You can earn attractive car insurance agent commissions on every policy that you sell
  • You can get complete online assistance from Mintpro to sell insurance and to boost your career.

To become a PoSP with all you have to do is just follow the below-mentioned steps –

  • Register online with Mintpro
  • Submit your KYC documents for completing the registration process
  • Access online training modules designed by Mintpro and learn the basics of insurance
  • Appear for an online examination from the comfort of your home or office
  • Clear the examination and get a PoSP certification

Once you become a PoSP you can easily sell vehicle insurance policies and earn commission on every sale.

Types of vehicle insurance policies

When it comes to vehicle insurance, the most popular forms of vehicle insurance plans are car insurance and two-wheeler insurance plans. Another type of categorizing vehicle insurance plans is private vehicle insurance and commercial vehicle insurance plans.

Both Commercial Vehicles and Private Vehicles can be of two types- Third-party liability-only plans and comprehensive plans that are available in the market.


  1. Third-party liability-only policy

    Third-party liability only policy is the mandatory policy as per the rules stated by the Motor Vehicles Act, 1988. This policy covers the third party liability which is incurred when the vehicle causes the following damages –

    1. Kills a third party
    2. Physically injures a third party
    3. Damages third party property

    In any of the above-mentioned instances, the vehicle owner faces a financial liability to compensate the third party for the damage caused. The third-party policy covers this financial liability and pays the liability incurred by the vehicle owner.


  2. Comprehensive policy

    Third-party policies cover only third party liabilities. If the vehicle itself suffers any damage, the costs incurred on its repairs are not covered under third party plans. This is where a comprehensive policy comes into the picture. The comprehensive plan covers third-party liabilities as well as damages suffered by the vehicle itself.

    Under a comprehensive plan, vehicle damage due to the following contingencies are covered –

    1. Natural disasters like earthquakes, lightning, landslides, floods, storm, etc.
    2. Man-made disasters like riots, malicious acts, fire, theft, etc.
    3. Damages suffered in transporting the vehicle

    The damages suffered by the vehicle are covered under the head ‘own damage cover’ and third party liabilities are covered under ‘third party cover’. Comprehensive policies, therefore, have different premiums for ‘own damage cover’ and ‘third party cover’. Both the premiums are added together to arrive at the total premium for the plan.

Commercial vehicle insurance plans

You can also sell commercial vehicle insurance policies. Mintpro facilitates vehicle insurance plans for both Goods Carrying Vehicles (GCVs) and Passenger Carrying Vehicles (PCVs). Thus, Mintpro gives you a wider choice of motor insurance policies which you can add in your kitty to expand your customer base.

Commission under vehicle insurance policies

The vehicle insurance agent commission payable to a vehicle insurance agent depends on the following four factors –

  • Type of policy that is sold -Comprehensive plans have higher premium rates due to the scope of coverage that they provide. As such, higher vehicle insurance agent commission can be earned by selling comprehensive insurance policies. Third-party plans, on the other hand, have lower premiums and, therefore, pay lower vehicle insurance agent commission.
  • Type of vehicle which is being insured -four-wheelers have a higher value than two-wheelers. As such, premiums for four-wheelers are higher than that of two-wheelers. The car insurance agent commission rate, however, is higher for two-wheeler premiums so that the agent can earn decent commissions by selling two-wheeler policies too.
  • Age of the vehicle which is being insured -the age of the vehicle determines the insured value of the vehicle. The insured value affects the premiums and, thus, the vehicle insurance agent commission that you can earn.
  • The amount of premium that is collected -the higher the amount of premium that you collect, the higher would be your premium.

Here is the maximum vehicle insurance agent commission that you can earn as a vehicle insurance agent by selling different types of vehicle insurance policies –

Type of policy

Type of the vehicle  Age of the vehicle 

The maximum rate of commission

Comprehensive policy Four wheelers and other types of private or commercial vehicles 1-3 years old 15% of the own damage premium
Two-wheelers 17.5% of the own damage premium
Comprehensive policy Four wheelers and other types of private or commercial vehicles 4 years and above 15% of own damage premium + 2.5% of third party premium
Two-wheelers 17.5% of own damage premium + 2.5% of third party premium
Standalone Third-party liability policy All types of vehicles Any age 2.5% of the premium

Source: IRDAI

Illustration

Now that you know the maximum vehicle insurance agent commission rates, let’s do a calculation of the car insurance agent commission that you can earn as a vehicle insurance agent.

Suppose you sell three policies in a week whose details are as follows –

Serial Number

Type of policy

Premium collected 

Policy No.1 Comprehensive car insurance policy (new car)

Own damage premium – INR 12000

Policy No.2

Comprehensive two-wheeler insurance policy (bike aged 4 years)

Own damage premium – INR 3500

Third-party premium (assuming bike’s cubic capacity is between 150 and 350 cc)– INR 1193

Total premium = INR 4693

Policy No.3

Standalone third party policy on a car

Third-party premium = INR 3221 (assuming car’s cubic capacity is between 1000 and 1500 cc)

 

The commission which you can earn would be calculated as follows –

Serial number

Commission earned

Policy No.1

Commission on own damage premium = 15% of 12,000 = INR 1800

Policy No.2

Commission on own damage premium = 17.5% of 3500 = INR 612.5

Commission on third party premium = 2.5% of 1193 = 29.80

Total = 642.30

Policy No.3

Commission on third party premium = 2.5% of 3221 = 80.50

Total commission earned = INR 2522.80

A career as a vehicle insurance agent is quite rewarding. So, become a vehicle insurance agent and sell vehicle insurance policies to your contacts. The policy is mandatory and so you would be able to find easy customers. You can, therefore, earn attractive vehicle insurance agent commission which would continue if you get the policies renewed on time. As such, the potential for earning is limitless and you can grow your career as a vehicle insurance agent.

Frequently Asked Questions (FAQs)

Can I sell health insurance policies too if I become a vehicle insurance agent?
Yes, you can sell health insurance policies as a vehicle insurance agent if the company with which you became an advisor sells health insurance. If, however, the company does not sell health insurance plans, you would not be able to sell them. Alternatively, you can become a PoSP with Turtlemint and sell both health and vehicle insurance plans of multiple companies through a single license.
Will my car insurance agent commission be taxable?
Yes, the vehicle insurance agent commission that you earn by selling insurance policies is your income. It would be taxable in your hands at your income tax slab rates.
What is the maximum age for becoming a vehicle insurance agent?
There is no maximum age for becoming a vehicle insurance agent. You can become an agent any time that you want to by getting a license to sell vehicle insurance policies.
Is there any limit to the car insurance agent commission that I can earn as an agent?
No, there is no limit to the income that you can earn as a vehicle insurance agent. You can earn unlimited vehicle insurance agent commission by selling as many policies as you can.