Postselection Of Insured

What Does Postselection Of Insured Mean?

Postselection of insured is a technique used by underwriters. It involves periodically examining insurance policies to determine whether they should be renewed or cancelled. This decision is based on whether or not the risk of insuring the policyholder has increased significantly.

Underwriting techniques like postseleciton of insured help insurance companies remain solvent and profitable.

Insuranceopedia Explains Postselection Of Insured

Sometimes, an asset simply becomes too risky for an insurance company to continue insuring. The risk of loss becomes too high for the insurer to still reasonably expect to profit. Homeowners who get dropped this way often end up shopping for high-risk homeowners insurance, which costs more but accepts properties that standard carriers turn away.

For example, if a landlord has property insurance for a business tenant, and that business tenant decides to start storing and selling pyrotechnic equipment, the insurance company may decide not to renew the insurance policy. In that case, the landlord may need to look for commercial landlord insurance from a carrier that handles riskier tenant operations.