Removing Discounts

[AZDave]

You have an account placed with a carrier that gives a credit for having both the auto and home. The insured goes to other carrier (not within your agency) for the auto insurance (direct - geico) . You still control the homeowners.

Do you go in and remove the discount for auto immediately, or wait for the carrier to do it on renewal?

The carrier said it is up to the agent to remove, if they want too. Else, they will remove at renewal automatically.

Or is this just vindictive thinking....

Dave

 

[Josh]

Depending on the situation, it can hurt your loss ratio, yeah? Some Allstate agents were routinely being creative on the apps and giving away discounts people weren't eligible for, then the loss ratios would tank and they didn't know why.

 

[BlockO]

Do you go in and remove the discount for auto immediately, or wait for the carrier to do it on renewal?

I don't think it is necessary. the carrier knows when a policy cancels and they know which policies are bundled. I've always let the carrier handle it.

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Depending on the situation, it can hurt your loss ratio, yeah?

True. not removing the discount can hurt your loss ratio. but only by a small insignificant smidgeon. but on the flip side, by removing the discount yourself, it could hurt your retention rate by even more.

furthermore, what happens if/when the insured calls the company directly to ask why they lost their multi-policy discount on their homeowners? if they happen to reach a dumb CSR, the CSR might tell them "your agent removed the discount".

I could just picture that happening. and if it did, the insured will be pi$$ed at you. say goodbye to that customer!

 

[insurance1822]

Let it ride until renewal & try to bring them back w/ a simple phone call saying "oh boy I see you lost the multi policy discount.."

 

[AZDave]

Thanks all for the input. I will let it ride, and let the carrier remove at renewal. No sense in giving them a reason to switch that line.

Dave

 

[djs]

Use it to your advantage.....

Call the client and say, "You know, I realized you cancelled your auto policy. Technically, I am supposed to remove the auto/home discount from your home policy, but, I'm going to leave it on and it will fall off automatically on the renewal. I'll give you a call just before that happens to make sure it is the right thing for you."

That way, the client feels like you are doing them a favor and you can get a chance to recover the auto down the road.

Dan

 

[BlockO]

that sounds good djs. I like that.

you could even take it a step further and say "even without your discount, your renewal rate should still be pretty reasonable. but if it isn't, let me know and I'll see if I have another company who beats it".