How to Successfully SWITCH Carriers Mid-Term

Are you unhappy with your current Workers Compensation Insurance coverage and want to cancel your policy before the effective date? Fortunately, you do have a choice! This article can help you decide if a mid-term switch would be benefit your business.​

Unfortunately, it is very easy for a business owner or human resources executive to end up overpaying for Workers Compensation Insurance without realizing it. Often times, their broker auto-renews them without discussing any rate changes. Other times, they may see a sudden and unexpected spike in their rates in response to a new claim. Regardless of the reason, the policy holder always has options and fortunately they don't even have to wait until the policy year is over to make a cost-saving switch. 

CASE STUDY: Our most recent success with a mid-term switch was with a Los Angeles based Nursing Home who ended up saving 66% off their premium. The insured had many claims over the past few years which was reflected in an experience modification rating of 1.90. With an experience modification this high, they were almost paying double the base premium for their operations. They were 3 months into their latest policy, but felt they’re premium was higher than it should be. That is when they reached out to Chief Insurance Solutions, LLC. We were able to assess their operations and submit to numerous carriers for new quotes. Even with the mid-term cancellation fee, the insured saved almost $100,000 a year by shopping for quotes.
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If you are hoping to cancel your Workers Compensation insurance policy while the coverage is still active, these are a few things to consider:

• You always have the right to cancel your Workers Compensation Insurance policy, but since your Insurance Policy is a contractual agreement, financial penalties will apply.
• It is always a safer practice to find new coverage, prior to canceling your current policy. A Lapse in coverage can be detrimental to your company in many ways. If you do have a lapse in coverage, some Insurance Carriers can bind coverage retroactively.
• By reviewing quotes with a brokerage, like Chief Insurance Solutions, LLC prior to actually canceling your current policy, you can avoid a lapse in coverage, and ensure the mid-term switch will be beneficial for you.
• The insurance company will apply a short rate cancellation table. This is a system developed to calculate the cancellation fee to charge depending on when you cancel the policy. The cancellation fee is in place because Insurance Companies cannot discredit that claims may have occurred during the coverage period, but were not yet reported.
• The insurance company will charge you more if you cancel your policy closer to the renewal date than closer to the expiration date.
• A cancellation audit will be conducted, and afterwards your Insurance Carrier will perform the cancellation premium adjustments.
• Your Policy will be adjusted sometime during your policy period for any changes to your current Experience Modification.