By Michael Miller, Smart Choice® State Director
Handling insurance policy renewals and expirations are the bread and butter of insurance agents. But what independent insurance agents may not realize—often until it’s too late—is that though they may own their agency, they may not own the right to renew their clients or requote clients whose policies have expired. Without complete ownership of their books of business, many agents are a lot less independent than they think.
Policies in Force, Renewals, and Expirations
First, some terminology. A “policy in force” is any type of policy—auto, health, disability, life, commercial—that is currently active. If payments are not made on a policy in force, it lapses and becomes expired. Renewing client policies keeps them in force.
As an agent, you’re responsible for the daily management of your policies in force, renewals, and expirations. You market your agency, make the sales pitch, cross sell policies, build the client relationship, send out renewal reminders, and follow up with clients who chose not to renew. After all this effort, you’d expect you’d own your client accounts.
100% Ownership Not Guaranteed
Unfortunately, that’s not always the case. Some carriers and cluster groups retain the rights to renew and follow up with clients whose policies have expired. If you choose to move a client to another carrier or break your relationship with a carrier or cluster group altogether, you may lose dozens—or even hundreds—of clients in the process.
As 100% ownership of your agency’s book of business is not guaranteed, it’s important to do your homework before working with an insurance carrier or cluster group. Ask specifically about who owns the rights to your clients’ policies in force, renewals, and expirations.
- Independent Agents