Is Google Ads worth it for a small insurance agency? A break-even worksheet

Google Ads is worth it for a small agency when the policies it sells are worth more to you than the ads cost. Clicks and cost per lead can't tell you that. What can is one number: how many sales a month the ads need to pay for themselves, worked out from your own commission and retention.

Key facts

• The average US auto premium was $1,438 a year per insured vehicle in the newest National Association of Insurance Commissioners (NAIC) data, released February 2026 (NAIC).
• Independent agencies spent $20,600 a year on marketing on average in 2026 (Big I Agency Universe Study).
• Average US auto policy retention was 78% at the latest published count (LexisNexis).
• Webdimonia's management fee is 10% of total monthly ad spend, with ad spend paid to Google separately.

The break-even worksheet has the four steps below, filled in with these figures and a column for yours.

Step 1: Add up the monthly cost

Your monthly cost is the ad spend paid to Google plus the management fee. Our example puts the whole average independent agency marketing budget into Google Ads: $20,600 a year is $1,717 a month. With our fee, the total is $1,888 a month.

Leave the website out unless you are building a page only for the ads. The Google Ads budget guide shows how to split a fixed budget between Google and management.

Step 2: Work out what one sale is worth

One sale is worth the commission on its first year plus the renewals you keep. In the example, one average auto premium of $1,438 a year, kept at 78% retention for three years, brings in $3,435 of premium:

$1,438 + ($1,438 × 0.78) + ($1,438 × 0.78 × 0.78) = $3,435

Your commission on that premium is what the sale is worth to you. We can't give you a typical commission rate: no regulator, trade association or carrier publishes one, and the figures online come from vendor blogs without a source. Use the rates in your carrier contracts. The table shows how much the answer moves with the rate.

The 78% figure is a carrier-level auto average, not an agency one, so use your own retention if you know it. A home and auto bundle adds a second premium to the same sale.

Step 3: Divide the cost by the value

Break-even sales per month = monthly cost ÷ value of one sale.

At a 12% commission, the ads need five sales a month to pay for themselves over three years.

Step 4: Check the target against your close rate

LocaliQ's 2026 benchmarks put the average cost per lead at $74.44 for "Finance & Insurance." At that rate, $1,717 of ad spend brings about 23 inquiries a month. To make the sales in Step 3, you would need to close about 24% of them at a 10% commission, 20% at 12%, or 16% at 15%.

Use benchmarks to catch mistakes, not to forecast: LocaliQ's "Finance & Insurance" category is broad and not broken down further. It covers far more than insurance agencies, and its leads are whatever conversions each advertiser chose to track (LocaliQ).

Is one in five your close rate on people who found you through Google? No published study gives a reliable close rate for insurance inquiries, so measure your own before you decide.

What changes the answer?

When the numbers fall short, four changes move them most:

1. Sell more per customer. A home and auto bundle adds a second commission to a sale you already paid to win.
2. Advertise what you close best. Put the budget on the products with your highest close rate and commission.
3. Answer within minutes. Shoppers compare agencies, and a slow reply loses an inquiry you paid for. See speed to lead.
4. Stop paying for the wrong searches. Job seekers, claims numbers and carrier logins never buy. The negative keywords guide lists what to exclude.

If you want these changes made for you, our Google Ads management covers setup, keywords, a landing page and call tracking.

How long should you wait before deciding?

Give the ads about three months, and judge them on your sales records rather than a week of clicks. Google says its automated bidding learning period never lasts more than seven days, and suggests judging over two conversion cycles or two weeks, whichever is longer. For target cost per acquisition (CPA) bidding, it suggests the last 30 days with at least 30 conversions.

At about 23 inquiries a month, a small agency won't reach 30 conversions quickly, which is why the longer window matters. Decide in advance what happens if the ads are still below break-even after three months: change the plan or stop.

How do you know which sales came from the ads?

Track calls and forms, and mark each inquiry as quoted or sold in your own records. The conversion tracking guide shows how to connect an inquiry to a bound policy where your systems allow it. A sale inside a carrier-controlled system may not be visible to an outside tracker, so keep your own log too.

Bring your commission, retention and close rate to a Google Ads strategy call. We will run them through this worksheet with you and tell you plainly if the answer is no.