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How To Make The Most Of Your Premium Finance Program

Here are some tips to make your premium financing go smoothly.

Delays in funding and or process can cause delays in payment to your carrier or general agent and add to the exposure of coverage not being bound (or being cancelled for non payment).

Delays are most often caused by the following:

  1. Incomplete Contracts (missing information, incorrect information)
  2. Contracts are not signed (missing the agent and or the insured's signature)
  3. Agency exceeding authority in quoting (collected too little down payment or allowed client too many monthly payments, exceeding maximum amount financed, fully earned fees were financed incorrectly, etc.)
  4. Underwriters cannot be contacted to verify policies
  5. Non-allowable carriers are on the contract (non-acceptable carriers, RPG's without prior approval)

Agents should be diligent in following up to make sure we have a proper contract and all necessary documentation such as a complete Invoice.  You may contact our office to verify if anything more is needed to fund a policy.

Use of software or Internet quoting is not a guarantee of acceptance of a contract.
Please be aware of special policy provisions, carrier ratings, etc.

Remember, accounts will not be funded until the effective date of the policy if it is in the future.

Note, after a six-month period with no new business, an agency may be set to “inactive” status. Please call for a quote and or to be reactivated if it has been more than six months since your last contract was placed with us.

Cancellations and Reinstatements are another area of common misconceptions. First off, we, the finance company, can only request reinstatement. We cannot force the company to reinstate an insured. Please make sure your insureds understand that reinstatement is not a right, it is up to the underwriter of the insurance company. Additionally, it is not the finance company’s responsibility to notify the insured if they are not reinstated. The agency needs to follow up with the underwriter to ensure reinstatement and then follow up with the insured and replace coverage promptly if the coverage is not reinstated. Failure to replace part or all of the coverage could leave you exposed if the insured has a loss.

Agents help during and after cancellation is greatly appreciated. While there is usually not recourse to you, the agency, on financed contracts, we do request and appreciate your help to expedite returns on cancelled accounts, or advising customers of deficiency balances.

A Few Important Things To Remember:

  1. Do NOT call and request to hold your cancellation pending a payment unless you have payment in hand. Should the payment not come in and our original cancellation date not be honored, your agency will then become liable for the shortage in returns.
  2. Please return any unearned premiums sent to your agency  ASAP. Many state statutes require that you return premiums within 15 days of receipt of the premium. This includes unearned commissions.
  3. If companies and or general agencies are being slow in returning premiums, we may, from time to time, ask you to call them for us to assist us in finding out the delay. We don’t “require” that you help us, but often the company and or GA will expedite a return faster if the agency calls.
  4. Interest continues to earn on accounts until we receive the pay-off. To preserve relationships for you with your insureds, it is helpful to get the return premiums in ASAP to ensure we do not need to collect shortages from your insureds.

Recourse to the agent, as stated above, is not customary. HOWEVER, in the case of mistakes, misrepresentations, and other agency errors, you may be responsible for shortages in return premiums. PLEASE know your policy provisions on your policies and advise us of short-rate cancels, minimum earned premiums or anything that might affect the returns on our premium in the event of cancellation.

We would like our relationship with your agency to be mutually beneficial. We will be keeping changes in procedures, etc. up-to-date on our web site. We recommend you check back frequently for any questions you might have.

If you have any questions or problems, please feel free to contact our office at 800-873-2732 x 453.