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Why Are We Being Non Renewed By Our Insurance Carrier?

By: Thomas M. Kallman

Let me begin by stating that you should not feel personably responsible if you have recently received notification of non renewal from your insurance carrier. Most all carriers use detailed statistics compiled over the last several years to determine acceptability of risk in any given geographic location or class of business, and thus feel they have done their “due diligence” in determining what factors will provide the best underwriting results for their company in today’s environment.

Factors used in determining a current acceptable profile may include geographic area, proximity to catastrophic elements like wind and flood, quality of construction, willingness to abide by loss control recommendations, prior loss history & results of the same class of business, and specific financial stability, and availability of reinsurance for this type of risk.

Choices available to most insurers are limited once the above data is compiled and evaluated and include some of the following: File for major rate increases which are sure to be unpopular with both consumers as well as insurance regulators, lose financial ratings established by companies that report financial stability grades such as AM Best, or simply non renew mass numbers of policies in areas causing the potential financial burden. Unfortunately, the latter choice has become most common in today’s market climate.

Some of the above factors used to determine long term suitability cannot be made palatable by individual policy holders, however other risk factors can be improved to make you more attractive as a policy holder.

Some suggestions include: never submit a claim for a minor first party loss, but rather understand that you have a long term relationship with your insurer, always be receptive to ideas and recommendations made by an insurance company loss control representative, report all third party loss incidents to your carrier immediately, and include as much documentation regarding the incident as possible to your insurer, be sure that you have made your environment safe and free from all possible foreseeable loss, and in my opinion, value long term relationships with your carrier and agent regardless of any sudden current incentive to switch coverage.

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