The Effects of Claims on Policy Renewals
Renewing your commercial trucking insurance policy can be a very daunting experience. The biggest shock comes when a company sees that its insurance premium/rate has increased from the prior year. If you happen to have filed a claim (or multiple) it could lead to your renewal cost increase. It is important to note that claims are just one of the many factors that go into determining an insurance renewal quote.
What is an Insurance Claim?
Your insurance policy is an agreement between you and your insurance company promising to financially cover you in the event of a covered incident. Each policy an insurance company writes provides a specific type of coverage. This is why it is vital to have a complete understanding of your insurance policy and what is covered under it. Since insurance can be a complex topic to comprehend, working with a knowledgeable insurance agent who can explain your policy and its coverages is vital.
Filing an insurance claim tells your provider an incident occurred and you would like their assistance with covering the costs, per your agreement (policy). However, this does not guarantee the insurance company will pay out. This is because the insurance company needs to complete an investigation into the incident to see if all the criteria are met per your agreement. If the insurance provider denies your claim, meaning the incident was not covered under your policy, the costs will have to come completely out of your pocket. If the provider approves your claim, the provider will cover up to your policy limits while you only need to pay the deductible. For covered incidents around Physical Damage policies, payouts are determined by the fair market value of the covered unit.
The biggest reason for a claim denial results from something specific not being listed on your policy. Once again, this is why it is crucial for you to fully understand what coverage is included and excluded under your policy. Also, you need to make sure to work with your agent if anything is to change so they can work to update your policy accordingly. It is important to understand that most trucking policies also require all drivers to be listed and approved. Unscheduled drivers may result in the denial of a claim.
Claims Effect on Insurance
Claims can be a big influence in determining an insurance rate but are not the only factor insurance providers look at. The good news is that a claim typically has no impact on the rate of your current policy. However, this is not always the case when the time comes for your policy’s renewal. There is also a chance for a policy to cancel because of a claim. No matter what, claims should always be reported to your insurance agency no matter how big or small the incident may seem.
Also, not all claims are the same. The type of loss that occurs can also affect whether or not a provider might increase your premium. Claims with larger amounts paid out typically have a greater impact than smaller losses. All of this is up to the discretion of the insurance company, not the insurance brokerage.
Staying organized is key. Keep all your claims documentation in an easily accessible file, this can include photos, dashcam footage, estimates, total loss documents, and police reports. This information can be especially important, for it gives the insurance provider a better idea of what occurred.
Important Claims Information for Renewal
During your renewal, provide your insurance agent with all of the proper materials such as loss runs, police reports, and additional information surrounding your losses. The agent then gives it to potential insurance companies to help you get a quality rate. Insurance providers use this information and other factors in the determination of how big a risk your company will pose to insure. You can never go wrong overcommunicating with your agent and providing them with more information than you may deem necessary.
If your insurance agency is a brokerage, they are not the ones responsible for determining your risk or rate. Their main role is to collect all the appropriate information to give you the best chance of receiving a rate designed for your business.
*Please note that this article only refers to the claims type of materials that a carrier should provide to their agent. There is plenty of more information that an agent will need when shopping a carrier out to insurance companies.
As an insurance brokerage, Marquee Insurance Group works with over 50+ A-rated insurance markets to offer clients the best possible rate that fits their company’s specific needs. Our agents have a vast knowledge of commercial trucking and insurance to provide our carriers with all the information they need to be successful on and off the road. We pride ourselves in simplifying trucking. If you are interested in learning more contact us by clicking HERE.
