Definition - What does Churning mean?
Churning occurs when an insurance agent replaces a policyholder's insurance policy for another insurance policy, usually without consulting the policyholder and often with no changes to the coverage itself. Agents who engage in churning do so in order to secure an additional commission for the new policy they swap in.
Churning is an illegal practice and it has no benefit for the insured.
Insuranceopedia explains Churning
Churning is mostly attributed to insurance agents, and most states have laws that will punish those who engage in the practice.
Requiring agents to inform the insured of any policy changes and providing them with clear and official documentation of any modifications to their policy is one measure that most insurance companies have in place to deter agents from churning policies.
Insurance agents are authorized to replace coverage on behalf of the insured. However, they must do so for their benefit. Replacing coverage becomes illegal and qualifies as churning when the sole purpose of replacing the benefit is to enrich the agent.