Question

When does an insurer reassess a policyholder's exposure?

Answer
By Jacques Wong | Last updated: March 28, 2017

There are a few common scenarios in which an insurance company might reevaluate a piece of business and make adjustments.

  1. Have you ever had a surprise premium increase when renewing your policy even though there was no significant or material change to your situation? This might be because there were significant losses to your "class" of risk during the previous policy period and so the underwriters have raised premiums across the board for your particular class of business. For example, one year there might be a lot of fire losses to restaurants, and even if your restaurant was not affected, your premiums might still go up.
  2. A material change reported during the policy term might trigger a reassessment. I see this happen most often when an insured decides to allow their burglar alarm monitoring subscription to lapse. This type of change is considered material and would need to be reported to the insurance company. The result is either a premium increase or a denial of coverage, although the latter is unlikely.
  3. Exposure could also be reassessed upon renewal if there is some material change. This happens a lot in commercial policies with significant product liability or business interruption exposure. If your sales or revenues have gone up from last year, or if you have started a new business unit, your insurance company will need to reassess your exposure when deciding whether to renew your policy or not.

Basically, insurance companies will routinely reassess policies during the renewal period or when some material change is reported to them in the mid-term.

Share this Q&A

  • Facebook
  • LinkedIn
  • Twitter

Tags

Home Insurance Underwriting Personal Lines

Written by Jacques Wong

Profile Picture of Jacques Wong

Jacques grew up around the insurance industry and began actively participating in 2013. Since then, he has gotten a Level 2 license, won Insurance Council of BC awards in 2015 and 2020 for academic excellence in the insurance licensing courses. He educates insurance professionals through PNC Learning and as a Thought Leader at ReFrame Insurance.

In his day job as an insurance broker, he helps businesses with creative risk management solutions and strategic advice when it comes to insurance.

More Q&As from our experts

Related Articles

Term of the Day

Omnibus Clause

An omnibus clause is a clause usually present in automobile liability insurance policies. It expands the coverage of the...
Read Full Term

Stay informed with Insuranceopedia!

The world of insurance can be complicated. Subscribe to the Insuranceopedia newsletter and stay in the know! Access expert content, industry term definitions and answers to your questions from knowledgeable insurance insiders. Arm yourself with what you need to know to keep your assets and your family safe.

Resources
Go back to top