What Insurance Terms Do I Need to Know in Texas? New Agent Guide

Why These Terms Matter

Getting licensed in Texas? You'll encounter these terms in your pre-licensing materials, state exam, and first conversations with agencies. Understanding this vocabulary helps you navigate the licensing process and sound professional from day one.

Many successful agents started with no insurance background, so don't worry if these terms seem unfamiliar. With proper preparation, you can master the essentials quickly. Learn how other career changers made the transition in our guide on becoming an insurance agent with no experience.

Texas Licensing Terms

TDI - Texas Department of Insurance. The state agency that regulates insurance and issues your license.

Pre-licensing Education - Training courses before taking your licensing exam (recommended but not required in Texas).

State Exam - Test you must pass to get your insurance license.

Lines of Authority - The types of insurance you're licensed to sell (Life & Health or Property & Casualty).

Producer - The official term for licensed insurance salespeople in Texas.

Continuing Education (CE) - 24 hours of education every 2 years to keep your license active.

Sircon - Online system for applying for and managing your Texas insurance license.

Fingerprinting - Background check required before getting licensed.

Basic Insurance Terms

Premium - What customers pay for their insurance policy.

Deductible - Amount customers pay before insurance coverage starts.

Policy - The insurance contract.

Claim - Request for insurance company to pay for a covered loss.

Coverage - What the insurance policy protects.

Liability - Legal responsibility for damages you cause to others.

Underwriting - Process where insurance companies decide whether to approve coverage.

Commission - How agents get paid - percentage of premiums sold.

License Types

Life and Health (L&H) - License to sell life insurance, health insurance, and related products. This path focuses on protecting people's health and financial future through life insurance, disability coverage, and health plans.

Property and Casualty (P&C) - License to sell auto, home, and business insurance. P&C agents help protect physical assets like cars, homes, and commercial properties. Learn more about starting a career in Property & Casualty insurance and why it's a smart career move.

General Lines - Broader license combining multiple insurance types, giving you flexibility to serve diverse client needs.

Choosing the right license type is crucial for your career direction. Compare your options with our detailed guide on Life & Health vs. Property & Casualty licenses in Texas to find the best fit for your goals.

Texas Auto Insurance Basics

30/60/25 - Texas minimum auto insurance requirements:

• $30,000 per person for injuries
• $60,000 per accident for injuries
• $25,000 for property damage

Liability Coverage - Required coverage that pays for damage you cause to others.

Comprehensive - Optional coverage for theft, weather damage, etc.

Collision - Optional coverage that pays to fix your car after an accident.

Essential Exam Terms

Peril - Specific cause of loss (fire, theft, accident).

Insurable Interest - Having a financial stake in what you're insuring.

Beneficiary - Person who receives life insurance benefits.

Rider - Additional coverage added to a basic policy.

Exclusion - What a policy does NOT cover.

Risk - The chance of loss that insurance protects against.

Agency Terms

Captive Agent - Works exclusively for one insurance company, typically receiving training, leads, and support in exchange for selling only that company's products.

Independent Agent - Represents multiple insurance companies and can offer clients various options. Independent agents have more flexibility but also more responsibility for generating their own business.

Lead - Contact information for potential customers who have expressed interest in insurance products.

Appointment - Official authorization from an insurance company allowing you to sell their products and earn commissions.

Understanding these career paths is essential for new agents. Discover more about what insurance agents actually do day-to-day and which role might suit your work style best.

Quick Study Tips

Know the Basics: Focus on Texas requirements (30/60/25, TDI, CE hours).

Practice Vocabulary: Use terms in context to remember them better.

Stay Focused: Master these fundamentals before diving into complex product details.

Your Next Steps

1. Complete Prep Education - While not required in Texas, it dramatically improves your pass rate and confidence level
2. Schedule Your State Exam - Book your test through Pearson VUE
3. Apply for Your License - Submit your application through Sircon
4. Get Appointed - Connect with insurance companies to start selling

The licensing process might seem overwhelming, but thousands of new agents successfully navigate it each year. Our comprehensive Texas prep course covers all these terms in detail plus everything you need to pass your exam on the first try.