Founders & Small BusinessFree
Business Insurance Renewal Review Report
A renewal quote changes the deductibles, sublimits and waiting periods at the same time, and only the premium arrives in a headline.
River reads the renewal against the expiring declarations page, then does the thing a broker's summary never does: it re-runs the claims you actually filed under the new terms. In the worked example the premium went from $34,800 to $41,200, up 18.4%. Underneath that, the property deductible went from $5,000 to $25,000, water damage picked up a $50,000 sublimit, the business interruption waiting period tripled, and wind and hail became 2% of insured value.
Those four changes are worth more than the premium. Kestrel filed three claims in five years, $138,800 of loss, and recovered $116,000 of it. The same three claims under the renewal recover $50,100. Recovery falls from 83.6% of the loss to 36.1%, which is $65,900 across five years or $13,180 a year of risk handed back to the business. The real cost of the renewal is $19,580 a year, or 56.3% on the expiring premium rather than 18.4%.
Written for the owner who gets a renewal seven weeks before expiry with no basis for comparison, told by a broker of nine years that the whole market is up and nothing can be done. An official notice arriving the same month gets the same treatment in the regulatory notice response, a supplier increase in the price increase response, and the lease behind the insured building in the commercial lease review. Proving current cover to a client is the certificate of insurance pack.
The carrier already has to tell you what got worse
The comparison is not optional reading, it is a disclosure the insurer owes you. California requires an insurer, at least 45 days before expiry, to deliver an offer of renewal stating any reduction of limits or elimination of coverage, and that statement has to identify the specific limits being reduced. Cancellation mid-term carries at least 30 days' notice, or ten for non-payment. So the document naming every reduction usually exists already, and it is the page nobody opens.
Percentage deductibles are where the quiet damage lives. A flat $5,000 wind and hail deductible reads almost identically to one set at 2% of insured value, and on $1,450,000 of building and contents the second is $29,000. That is 5.8 times the exposure on the single peril most likely to close the shop for a season. A waiting period does the same trick on time rather than money: 24 hours to 72 hours removed $15,600 from the one business interruption claim Kestrel has ever filed.
Then there is the number to take into the conversation. Over five years the carrier collected $174,000 of premium and paid $116,000 of claims, a loss ratio of 66.7%. Against a 65% underwriting target this account is marginal rather than terrible, which is a very different negotiating position from the one an owner assumes when told the market is up. Ask what the account's own loss ratio is, and whether the tightened terms are underwriting or negotiation.
How it works
Send both policies
The expiring declarations page and the renewal quote, with any endorsement schedules attached.
Add the claims
Every claim in the last five years, with what was paid and roughly when.
Describe the operation
What you actually do, what you hold on site, and what would hurt most.
Read the comparison
Terms compared, claims re-run, gaps named, and the push-back list in priority order.
What you get
- Every claim you have filed re-run under the renewal terms, with what you would recover now
- The expiring and renewal declarations pages compared line by line, not summarised
- Percentage deductibles converted into the dollar figure they will actually cost you
- The real cost of the renewal, premium plus the risk moved back onto the business
- Coverage gaps against what your operation actually does, rather than a generic checklist
- Your own five-year loss ratio, which is the number the underwriter is already looking at
Common questions
Why compare against my own claims instead of the market?
Because a market average cannot tell you whether a $25,000 deductible matters in your building, and your claims file can. Kestrel had filed three claims, and three of the four changed terms touched them directly. That is what turns a declarations page into a number instead of a list of clauses.
The broker says the coverage is basically unchanged. Is he wrong?
Usually he is summarising honestly and summarising the wrong thing. Limits often are unchanged, and limits are not where renewals move. Deductibles, sublimits, waiting periods and the switch from a flat deductible to a percentage all sit below the limits and all reduce what you collect.
What is so bad about a percentage deductible?
It looks like a rounding change and behaves like a new policy. Two percent of $1,450,000 is $29,000 against a flat $5,000, so the exposure grows 5.8 times, and it grows again every time you insure more. It also applies to the peril most likely to shut the building for a season.
How do I use my loss ratio?
As the opening question, not the argument. Five years of premium at $34,800 is $174,000 against $116,000 paid, so 66.7%. Ask the broker what the carrier has the account at. If the answer is that the account is fine and the market moved, the tightened terms are negotiation rather than underwriting.
Should I go out to other markets?
The review tells you what to ask for rather than where to shop, but it makes shopping possible. A specification listing the deductibles, sublimits and waiting periods you need is what produces comparable quotes. Without it you get four quotes at four different levels of cover and no way to read them.
I only have seven weeks. Is that enough?
It is enough to negotiate and usually not enough to move carriers comfortably. Start with the three highest-value terms, because a carrier will often restore one or two rather than lose an account late. Note that renewal terms are generally required to reach you well before expiry, so ask why they were late.
Will this find coverage I do not have at all?
That is the second half of the read. Gaps are matched against what your operation actually does, so customer property held on site, spoilage, vehicles used for deliveries and the cost of getting back into production all get checked. A generic checklist misses these; a description of your shop does not.
Business Insurance Renewal Review Report
Fill in the form and your workspace opens with the work already underway.