Insurance Class Codes1?!

[iiinycboi]

Ok, so i would like to reach out to all the seasoned agents of P&C.

I am new to commercial lines, but i do a policy a week. I read the entire policy front to back twice to make sure i understand it.

But it seems to me that 99% of all my commercial lines clients gives me a policy with the wrong class code! Their all similiar to what the "real" class code is. This is very frustrating. (when i quote correct class code its always higher)

Is this some sort of industry trick to keep premiums low??? Or this is generally an accepted practice, both the carriers and agents are aware of? I'm very concern about the claims side if there was a claim. Does insurance company's payout small-med claims without caring the class codes?

 

[mmaedelins]

Interesting...I've only seen one or two that were incorrect but coded at a higher rate so I was able to save them some money by coding it correctly. As far as I know, this is not something that is a common practice (at least not around my area) but that doesn't mean it doesn't happen. I would assume if the code is way off and there is a big claim, there would be an issue getting your client the money. I would make sure to explain to the client that his/her code was wrong and it could cost him/her to leave it that way. Even though the rate will be a few dollars higher, it will cover their butt in the long run!

Are all the incorrect codes coming from the same few insurance companies or are you seeing it across the board?

Best of luck!

 

[iiinycboi]

I'm seeing it from a lot of different agencies.

I assume they wont really look into it for a small - med claim but big claims they will probably look into it.

It could be that some carriers uses this class code and under the business description they make a "note"

I'm new and i hate to refuse business, but i keep getting the policies with wrong class codes and the client wanting the same class code or they wont change over (mostly because its more expensive)

 

[mmaedelins]

I would just ask whoever you are working for about it and ask what he/she wants you to do. I'm sure he/she has seen this before and will have some sound advice for you.

 

[sgriswold]

I'm not going to beat around the bush. There's a staggering number of commercial brokers/agents that are stupid, lazy, or crooked. I run across this ALL THE TIME, especially with policies that are written by big agencies or carrier direct -- e.g. when the writing agent really can't be arsed to do the research. Not so much with captive agents or other indy brokers.

I figure this is usually caused by whomever just quoting the policy based off the previous carrier, which was probably done wrong (via assumption or ignorance).

If I'm not 100% sure of a class code, I grill the client to make sure they tell me everything that person does, and then call the WCIRB to get a final determination. At least that way I have someone accountable for it.

Recent examples of wrong codes:
- Nonprofit designated as "Clubs NOC." Changed to outside sales. Premium reduction of $5000/year.
- Church with preschool designated "Private School." Changed to day care. Premium increase, but at least now they won't have audit problems.
- Tons of risks with "clerical" that should have been "outside sales."

Personally, I'm fine with other people screwing stuff up. It makes me look better when I come in and fix it.

 

[iiinycboi]

Yes, it makes me look more professional and knowledgeable, but my prospect based all give me the same what 1.5x 2x premium? the other guy say its okay so imma stick with them.

 

[Nickie_heath]

The right class code is pretty important, and picking the wrong one for the discount could come back to bite you.

 

[Guest]

I have enough carriers and brokers, that before I start paperwork, I simply email the borkers, U/W the companies WEBSITE, let them tell you if they write that or not, they will know and check the code for you and you can even ask what code it is.....

I think this is easier, then you can eliminate the carriers that dont want this type of work, quick and easy.....

Remember, If the code is wrong, the agent "could" always be doing it to get the business.....even if it is coded wrong, I would think, most companies will still pay the claim.....then change the code and bill accordingly........

 

[sgriswold]

Yes, it makes me look more professional and knowledgeable, but my prospect based all give me the same what 1.5x 2x premium? the other guy say its okay so imma stick with them.

Either you need to do a better job of telling the client the importance of doing things right, or you need more savvy clients. I try not do deal with anyone who cuts corners. It's bad practice for everyone involved.

 

[Scottyj]

Here is what I do in this case...

1) Tell them the account is coded wrong and that there is a large possibility they are paying too much or too little.

2) let them know on a large claim they could be opening themselves up to recieving a notice of owed premium... usually a large amount.

3) Tell them you are here to correct this mistake and protect them from future mistakes that could result in them oweing a lot of money... Dont bad mouth the other agent simply point out the errors and and fix them

4) Provide them with the corrected quote... if they choose to go with you great... if not then I usually reflect upon a quote from Art Williams... "All you can do, is all you can do, but all you can do, is enough"

In many cases with these situations if it does not lower the insureds premium they are going to stay where they are... just take comfort in the fact you did what you could and when that comes back to bite them... well you may be the first thing that jumps into their mind.

Besides you dont want clients on your books who are ok with being dishonest... when they say no thanks, I will keep doing it this way... that usually affirms to me that they dont belong on my book anyways.