Am I Being Underpaid?
As someone new to the industry, I started my journey at State Farm with a base salary of $50,000, but I’m not fully clear on my commission structure. I recently passed my P&C exam with a score of 125/150—yay for me! However, I’m questioning whether this base salary is appropriate for someone starting out in NYC, especially since I don’t have prior experience in insurance sales.
I do, however, have a successful small business where we achieved a 40% close rate and grossed $56,000 last year, with plans to either maintain or double that this summer. I’m in the process of hiring new team members and building an entire operation (creating employee agreements, training modules, and overseeing training for receptionists and estimators in the power washing sector). Additionally, I’ve facilitated $1.5 million in funding across 56 companies in the U.S. and have spent the last four years in high-pressure sales. At 22, about to turn 23 in April, I can’t help but feel that my $50,000 salary might be on the lower side—possibly because of my age and relative inexperience.
After taxes, I take home about $38,000 before commission. Given that the average cost of living for a single individual in my area is around $69,000, I would need to make an additional $31,000 in commission just to maintain a comfortable lifestyle. While I currently live with my parents to save money, I’m curious: Is a $50,000 base salary too low for my situation? My agency is ranked #15, which shows strong leadership, but they are well aware of my background and achievements. What do you think?
First of all, congratulations on passing your P&C exam and on the success of your small business! That’s an impressive accomplishment at such a young age.
Regarding your base salary of 50k in NYC, it’s understandable to question whether you are being underpaid, especially given your skills and experience. NYC is known for its high cost of living, and a 50k base salary may not be sufficient for many single individuals in the area, particularly if housing costs are factored in.
While your experience in high-pressure sales and your entrepreneurial success demonstrate valuable skills that could certainly enhance your value in the insurance industry, remember that entering a new field often involves starting at a foundational level. Some companies may offer lower starting salaries for new hires, especially if they lack direct experience in that specific sector.
Since commission structure plays a big role in your total earnings, it’s crucial to understand how it works at your agency. If you can leverage your sales skills and maintain your close ratio, you may be able to significantly increase your earnings through commissions.
Consider discussing your salary and growth potential with your supervisor or agency director. It may be beneficial to express your enthusiasm for the role and communicate your future contributions while also seeking clarity on potential salary increases as you gain experience and improve sales performance.
In short, while a 50k base might feel low considering your background, it’s important to weigh the potential for commission and career advancement within the agency. If you’re not satisfied after some time or if the commission structure doesn’t meet your needs, you might consider exploring other opportunities that align better with your financial goals.