Loss Run Surprise

Loss runs are documents prepared by insurance companies to show the claims experience of a particular client. They're often required as part of the underwriting process to make sure the prospect you're quoting isn't a complete slug. The quotes are often well underway, and sometimes the policies have already been bound before the loss runs are finally received.

We had a competitor who was well known for dragging out the process of providing loss runs to his clients. The State has a 15 business day requirement, but they often played games with those things in an effort to screw up our deal.

When I was newly licensed and undergoing my first day of cold-calling with one of the veterans we got a call from a church and school that had discovered that their insurance had cancelled weeks earlier and wouldn't be reinstated. That should have been a warning that all was not well with the account, but we dropped what we were doing and drove 45 minutes to the church to meet with the administrator.

He was fairly new on the job and when we asked about the church's loss history he said he wasn't aware of any claims. He probably wasn't, but we asked him to request a loss run from his old company and we quickly put the quote together. Within a couple of days I picked up the down payment for my very first decent sized account. I was feeling pretty lucky.

A few days later the loss run came in the mail. Unlike what the administrator had told us, there was a claim...a big one: $220,000 for an old lady who had tripped over a sprinkler head and suffered extensive injuries. I thought for sure the whole deal was going to go up in smoke.

The underwriter was not happy, but agreed to keep the account provided but take all the credits off and pile on some extra charges. The church's premium jumped something like $2,500 a year, which turned out to be a blessing - not for them, but for me. More commission. They had to have insurance and we were willing to provide it at a healthy price. Not exactly a win-win, but not bad.

Advice to churches: Order a loss run before you start shopping for bids, and don't forget to get bids every year.

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