COMMERCIAL INSURANCE
RENEWAL PROCEDURE
We divide commercial accounts into Regular Commercial Accounts and Special Commercial Accounts. The determination of the classification of the accounts depends on size. If the agency is 'average', that is, approximately 80% of their accounts are Personal Lines and 20% Commercial Lines, then the top 4% of their accounts are considered 'Special'.
Example:
An agency has 1600 Personal Lines Accounts and 400 Commercial Accounts.
Then 80 Accounts (4% of 2,000) are considered Special.
These Special Commercial Accounts usually represent 50 to 60% of the gross agency income and, therefore, exemplify a major source of agency revenue. It is prudent that they be handled with the best service and services that the agency has to offer.
The Regular Commercial Accounts, on the other hand, are usually very small, but are handled the same way as the Special Accounts. This is usually disastrous to the average independent agency, in that the profits derived from the Special Commercial Accounts are spent processing the Regular Accounts.
The unprofitability of the Regular Commercial accounts usually comes from the fact that there is producer involvement in the renewal process. With this in mind, two separate renewal procedures have been created to eliminate producer involvement where it is unprofitable and unnecessary.
One more comment. Many Commercial Accounts are now being issued on direct bill. Direct bill does not remove the responsibility of risk management from the agent. It is just an alternative to the traditional billing method.
RENEWAL PROCEDURE
REGULAR COMMERCIAL ACCOUNTS
1. CSR/Marketer runs automated expiration list 120 days prior to expiration. (Example: On Jan. 1, CSR/Marketer runs a list of expirations for April)
2. CSR/Marketer extracts the regular commercial accounts for renewal processing.
3. If an account is not to be renewed and will not be remarketed, the CSR/Marketer notifies the customer in writing.
4. CSR/Marketer determines whether or not the account is to be remarketed.
- If account is to be remarketed, CSR/Marketer contacts carriers or consults manuals to determine acceptability of account by prospective company.
- CSR/Marketer reviews the new company(s) applications to determine if any additional information is required by them.
5. CSR/Marketer updates Commercial Lines Checklist Form and mails to insured with Cover Letter.
Commercial Lines Insurance Checklist
The undersigned insured acknowledges that the undersigned agent has thoroughly explained all insurance coverages recommended below.
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We Write
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Does Not Need
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Insured Elsewhere
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Recommended
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BUILDINGS
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Basic
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Broad
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Special
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Earthquake
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Flood
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Water Damage
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Replacement Cost
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Increased Cost of Construction
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Demolition
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Signs
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Plate Glass
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We Write
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Does Not Need
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Insured Elsewhere
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Recommended
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LOSS TO BUSINESS PERSONAL PROPERTY
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Basic
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Broad
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Special
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Earthquake
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Flood
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Water Damage
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Replacement Cost
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Improvements/ Betterments
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We Write
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Does Not Need
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Insured Elsewhere
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Recommended
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LOSS TO BUSINESS PERSONAL PROPERTY
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Auto Physical Damage
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Aircraft Physical Damage
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Marine Hull
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Transportation Floater
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Equipment Floater
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Salesman Samples
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Installation Floater
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Processing Floater
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Computer
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We Write
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Does Not Need
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Insured Elsewhere
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Recommended
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LOSS OF INCOME
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