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Life is busy and ever-changing. If you are like most, your business insurance policy may not be a top priority. However, many people don’t realize just how important insurance is until it’s too late; moreover, the importance of paying a premium on time and providing the necessary documents prior to binding coverage. Your effective date is dependent upon when all items are returned to your agent and you receive bind confirmation. Yes, a policy renewal can sneak up on you; but that is why it’s so important to be prepared and communicate with your insurance agent.
It is important to send everything required prior to your effective renewal date. If you are planning a vacation, plan ahead, and handle your insurance renewal before leaving town. Most agents send out renewal quotes weeks in advance, giving you ample time to pay your premium. This way, your vacation isn’t interrupted by business matters and you avoid a coverage lapse. Think about what could happen – an uninsured claim due to the fact that no coverage is in place and you may now be ineligible for coverage due to the lapse and uninsured claim.
During your current policy term, skipping payment can lead to cancelation. This could make it hard to find coverage elsewhere. Putting off paying a premium can lead to problems down the road. Oftentimes, carriers do not want to write insureds who have a poor payment history or have had a coverage lapse. Insurance companies can base their decision to write your new policy on this information and in turn, choose to decline your submission due to a coverage lapse.
The importance of prompt premium payment can also be seen when the policy comes up for renewal. If you’ve had a negative payment history in the past, your payment choices might be eliminated and your only option might be to pay in full. So, if you decide to finance your premium, remember to pay monthly installments on time or set up auto debit. You can work with your agent on an auto-withdrawal cycle that works with your EFTs. For example, maybe your monthly client EFTs are deposited on the first; so, have your premium paid on the fifth, so there are funds in the account.
Concerned about affording your premium during slow season? Make sure you plan ahead. While busy season is in full effect, set funds aside for upcoming payments. Although insurance can feel like a burden, it is an extremely necessary part of your business portfolio and it’s even more important to handle it appropriately. Make sure prompt payment is at the top of your list.
Your insurance agent does not want to bug you about paying. They do not want to inform you that the carrier declined coverage due to non-payment or a coverage lapse. While these reasons for declination may seem silly to you, it’s a reality that we see all of the time.
Not all insurance companies provide a grace period, so don’t rely on this as a built-in cushion. If you’re worried about being able to make your payments on time, we advise you to plan ahead. Set up automatic withdrawals or set aside money to pay the premium when it is due. Your effective date should not change from year to year. It is important to be prompt and consistent with payment, along with getting the other required documents back to your agent promptly.
One of the best ways to get an affordable insurance premium is to work with an agent who specializes in your industry. If you’d like more tips or have any questions, feel free to contact our office.
Jenny is Vice President of Universal Insurance Programs, based in Phoenix, AZ. She works with new and existing salon owners to determine and provide insurance coverage for their unique business models. Contact Jenny with any questions regarding your insurance at 800.844.2101 x1480 or email jennyb@univins.com.
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